Profit and loss - balance sheet

Profit and loss - balance sheet

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Dear all, 

Can anyone help me please.

Earlier this year i prepared the bookkeeping for one of my clients. At the beginning of the accounting year there was a balance in accruals from the previous year. During the year i posted several invoices to expenses (profit and loss), I have now realised these invoices should have been posted to accruals (balance sheet).

How can i fix this? As when we start the new year the profit and loss accounts will be cleared from sage so only the balance sheet accounts remain?

The final accounts have already been filed online several months ago.

I would be very grateful for any help.

Replies (11)

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By Ray Thomas
08th Nov 2014 17:52

Is there actually any way to fix this?

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By ShirleyM
08th Nov 2014 18:10

Who prepared the accounts?

The accountant probably reversed the previous years accruals, and calculated new accruals.

Ask them for the closing TB balances.

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Replying to Red Leader:
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By Ray Thomas
08th Nov 2014 18:15

Thank you Shirley,

I will ask for the closing trial balance.

If no reversal was made at the year at the year end is there any way of reversing it in the following accounting period?

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By ShirleyM
08th Nov 2014 18:31

I doubt that the accruals were not reversed

Have a chat with the accountant and ask them for a breakdown of the accruals. Until you know what they are ... you can do nothing!

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By Ray Thomas
08th Nov 2014 18:38

The balance for accruals at the start of the accounting period was because of management fees that should have been incurred in the previous period but the invoice was issued after the year end.

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By ShirleyM
08th Nov 2014 19:22

That's unusual

There are usually some accountancy fees in accruals.

If you know for sure what the accruals are, and want to reverse them, then do so.

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By Ray Thomas
08th Nov 2014 19:47

Would that not be double accounting for the invoices though? As the invoices which should have been posted to accruals to clear the balance were posted directly to expenses. Although I suppose here the expenses have already been double accounted for: Dr expense - Cr accrual in the first instance and then last year Dr expense - Cr creditors. That accounting period has already been filed so in the new years accounting period if i reverse it this period it will clear the accrual balance but will leave a negative expense for management fees.

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By ShirleyM
08th Nov 2014 20:00

Invoice

The invoice should have been posted to the expense, and then the accrual reversed.

If you have posted the invoice to accruals then why is there still a balance in accruals? Did the amounts not agree?

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By The Grammar Police
08th Nov 2014 21:30

Take a piece of paper

and a pencil, and write down all the journals you need to make to correct it.

 

I assume you mean that the payments were incorrectly posted, as the invoices were posted in the PYA.

 

Either rework the PYA and admit the error, or run the year end and enter the journals you wrote as above.

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By buttinski
09th Nov 2014 13:11

Ask the accountant

for the 'year end accounting journals' that converted your Sage records into the final accounts.

As Shirley has suggested, you probably don't have a problem.

If anything has been 'double counted' I would simply adjust it this year (telling anyone who matters, but only if the figures are material to anyone/anything.

If, somehow, you have processed invoices twice and people have been overpaid then claim it back, although I doubt that this has happened if you are only talking about accounting adjustments made at the year end.

Depending on the size of the company (and its activity), I would have expected accruals for all sorts of things unless it was a holding company or subsidiary of some kind.

There is no point in agonising over too much until you have spoken with the accountants.

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By Stuart.thomson
09th Nov 2014 19:22

I would also check the dates for the posting of the invoices. Most bookkeepers will post based on invoice date and don't think about accounting year ends (why should they!).

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