Balance Sheet out by £1 on second year

My second year book accounts are out by £1 but rounded HMRC figures balance

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I have double checked creditor and debtor figures, turnover and expenses.

Calculated figures are calculated not just rounded from book.

My Figures below:

Profit and Loss Account Rounded Figures (HMRC) Actual Figures (Book)
         
  2019/2020 2018/2019 2019/2020 2018/2019
         
Gross Profit or (Loss) £11,456 £900 £11,456.00 £900.00
Distribution Costs        
Administrative Expenses £11,231 £1,130 £11,231.30 £1,129.88
Operating Profit or (Loss) £225 -£230 £224.70 -£229.88
Interest Receivable and Similar Income £0 £0 £0.00 £0.00
Interest Payable and Similar Charges £0 £0 £0.00 £0.00
Profit or (Loss) Before Tax £225 -£230 £224.70 -£229.88
Tax on Profit        
Profit or (Loss) for Period £225 -£230 £224.70 -£229.88
         
Balance sheet        
At 05/04/2020        
         
Fixed assets        
Intangible assets: £0 £0 £0.00 £0.00
Tangible assets: £0 £0 £0.00 £0.00
Total fixed assets: £0 £0 £0.00 £0.00
Current assets        
Stocks: £0 £0 £0.00 £0.00
Debtors: £11 £20 £11.30 £19.85
Cash at bank and in hand: £53 £18 £53.05 £18.03
Total current assets: £64 £38 £64.35 £37.88
Prepayments and accrued income:        
Creditors: amounts falling due within one year: £67 £267 £66.53 £266.76
Net current assets (liabilities): -£3 -£229 -£2.18 -£228.88
Total assets less current liabilities: -£3 -£229 -£2.18 -£228.88
Creditors: amounts falling due after more than one year: £0 £0 £0.00 £0.00
Provision for liabilities: £0 £0    
Accruals and deferred income: £0 £0    
Total net assets (liabilities): -£3 -£229 -£2.18 -£228.88
Capital and reserves        
Called up share capital: £1 £1 £1.00 £1.00
Revaluation reserve: £0 £0 £0.00 £0.00
Profit and loss account: -£4 -£230 -£4.18 -£229.88
Shareholders funds: -£3 -£229 -£3.18 -£228.88

Replies (30)

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By User deleted
12th Jan 2021 14:01

Don't worry about it, no one will care.

Although, is it really worth getting out of bed for to produce so little

Thanks (2)
By Duggimon
12th Jan 2021 14:03

Your journal, for those accounts would be

Dr Expenses 11231.30
Dr Bank 35.05
Dr Creditors 200.23
Cr Income 11456
Cr Debtors 8.55

That journal does not balance, so you've definitely made a mistake somewhere. I have no idea how HMRC software works so I don't know how that's possible, but you've posted an imbalanced journal so your accounts don't balance.

Thanks (1)
Replying to Duggimon:
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By dayofthejackal
12th Jan 2021 14:35

The balance sheet figures are end of year figures, running totals, so they are not added or subtracted from previous years.

Thanks (0)
A Putey FACA
By Arthur Putey
12th Jan 2021 14:19

To save time, put the £1 in yourself, or get 100 members on here to crowdfund 1p each

Thanks (2)
Psycho
By Wilson Philips
12th Jan 2021 14:23

What is the question?

Thanks (0)
Replying to Wilson Philips:
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By dayofthejackal
12th Jan 2021 14:36

Any ideas why it is £1 out?

Thanks (0)
Replying to dayofthejackal:
Psycho
By Wilson Philips
12th Jan 2021 14:43

Because you've made a mistake somewhere. Without seeing at least the opening and closing trial balances and summary of nominal ledger transactions there is no way of knowing where that mistake is.

Thanks (1)
Replying to dayofthejackal:
By ireallyshouldknowthisbut
12th Jan 2021 14:42

£1 out is HMRC's code that they think you accounts are wrong and they think your expenses incorrectly including monies paid to directors.

Its a "garbage in garbage out" coding.

Thanks (1)
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By dayofthejackal
12th Jan 2021 15:24

2018/2019 Closing Figures

Creditors
Petty Cash Owed £177.76
Directors Account £89.00

Debtors
VAT Account (overpaid) £19.85

Cash in Bank and Hand £18.03

2019/2020 Figures
In Out Balance
Directors Account £85.00 £175.00 -£1.00
Petty Cash Owed £188.77 £300.00 £66.53
Cash in Bank and Hand £13,832.20 £13,797.18 £53.05

Expenses
Directors, Employees and Subcontractor (CIS Only) £10,990.00
Bank, Credit Card and Other Financial Charges £71.00
General Administrative Expenses £170.30

VAT Account
VAT Additions £61.73
VAT Payments £52.18
(overpaid) -£10.30

Thanks (0)
Replying to dayofthejackal:
Psycho
By Wilson Philips
12th Jan 2021 16:01

Your debits/credits (ins/outs) do not balance (by £2). I have absolutely no idea why not. At a guess, I'd say that it has something to do with the Director's Loan Account, but it could be anywhere.

Thanks (0)
Replying to Wilson Philips:
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By dayofthejackal
12th Jan 2021 17:05

£2? Total net assets -£2.18 Shareholdfunds -£3.18 Have I missed another pound? Directors account is right and bank and cash match ingoing out going. Checked invoice amounts against bank statements etc and things match up. Just missed something somewhere.

Thanks (0)
Replying to dayofthejackal:
Psycho
By Wilson Philips
12th Jan 2021 17:56

Yes, £2. If you take the opening P&L reserve and add in this year’s profit you’re £2 adrift.

Thanks (0)
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By pauld
12th Jan 2021 16:01

I thought it was a myth but accountants do actually get excited trying to find those missing pennies.

Thanks (0)
Replying to pauld:
Psycho
By Wilson Philips
12th Jan 2021 16:09

Yep - all 200 of them

Thanks (0)
Replying to pauld:
paddle steamer
By DJKL
12th Jan 2021 17:17

I certainly do with bank recs. At my interview for my apprenticeship the senior partner growled at me to move some papers piled on his vast desk, asked if I smoked, threw a packet of cigarettes at me telling me to take one then launched into the interview with "Why do we do bank reconciliations", I mumbled something about ensuring the bank was correct to which the large Glaswegian accountant opposite me growled "Fraud, we do it to stop Fraud!!"

( I think I got the job due to my then being a smoker, he was always running out and would send his secretary to me in the audit room to see if I could "lend" him some)

Thanks (3)
A Putey FACA
By Arthur Putey
12th Jan 2021 17:28

definitely one from the pages of "why accountancy is not boring"

Thanks (1)
A Putey FACA
By Arthur Putey
12th Jan 2021 17:35

Pish taking aside, a number of software are known to throw a £1 imbalance due to roundings when certain balance sheet figures are carried forward. Retained earnings and assets usually. When last year's movements are added to last year's brought forward balances to create the following year's brought forward balances and the combined total rounded up is £1 more than the two rounded down figures, and all that.

Thanks (1)
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By Matrix
12th Jan 2021 18:35

What was your double entry for the share capital?

Thanks (0)
Replying to Matrix:
Psycho
By Wilson Philips
12th Jan 2021 19:23

That shouldn’t matter, since py balance sheet balances.

Thanks (1)
Replying to Wilson Philips:
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By Matrix
12th Jan 2021 19:51

It is a fair question given the accounts are out this exact amount, he could have undone one side of the entry made last year. Maybe he can advise if he is using double entry bookkeeping or not.

Thanks (0)
Replying to Matrix:
Psycho
By Wilson Philips
12th Jan 2021 19:59

He could have done, but the difference is £2

If he wants to find it he’s going to have to go through the books entry by entry.

Thanks (0)
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By paulhammett
12th Jan 2021 19:07

Just ‘lose’ the £1 somewhere, life’s too short. Move on.

Thanks (0)
Replying to paulhammett:
Psycho
By Wilson Philips
12th Jan 2021 19:25

But it’s not £1. It’s £2 - that makes it material ;-)

Thanks (5)
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By Matrix
12th Jan 2021 20:47

The P&L is £1 out in the bottom half of the 19-20 balance sheet.

£224.70 - £229.88 = £5.18

You have £4.18 so you need to change it to £5.18.

I guess that means it is £2 out as Wilson says so you need to revisit your bookkeeping.

Thanks (2)
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By dayofthejackal
12th Jan 2021 22:32

Applogies it is £2 out.
Excel was adding P&L and last years shareholders, not P&L and last years P&L for running total of profits.
I was so fixed on finding £1 I hadn't noticed it.
Now only £2 out.
Going to check all the formulas on the document.
I had copied and pasted sheets from and other company accounts excel which have always been correct to the penny for the last 8 years, so hadn't checked the formulas.

Thanks (0)
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By Truthsayer
13th Jan 2021 12:19

If it was a material amount, I suspect far fewer people would bother answering!

Thanks (1)
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By David Gordon FCCA
15th Jan 2021 12:33

A)
It is possible on a very popular acs program to inadvertently post one sided entries. So, you get an unbalanced TB. If your client is of any size at all, providing you have eliminated most obvious mistakes, it is quicker and cheaper just to "Fix" the difference.
Keep in mind the ancient audit clerk's caveat, it could be £1,000 one way and £999 t'other.
B)
On the otherwise competent stress-free program I use, this sometimes happens. The reason is that the program rounding up of previous year's balances b/fwd sometimes causes a hiccup.
The cure is (in my ac program case) to post £0.50p to the P&L b/fwd and £0.50 to director's ac B/FWD
Which is Dr and which Cr depends which way the diff is.

Thanks (0)
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By dayofthejackal
14th Feb 2021 13:07

Just to let you know I found the error. I had a £2 bank charge on my accounts, but the bank refunded it and I didn't have a note of it in the accounts. So the bank closing balance was correct when checking. It was an accounting entry error. Accounts now balance to the penny.

Thanks (0)
Replying to dayofthejackal:
Routemaster image
By tom123
14th Feb 2021 15:42

Thanks for the post script!

Thanks (0)
Replying to dayofthejackal:
Psycho
By Wilson Philips
14th Feb 2021 15:43

Your client will be thrilled to know that his accounts are now correct and I’m sure more than happy to pay the extra fee for sorting them out ;-)

Thanks (0)