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Opening adjustment question

Opening adjustment question

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Hello, need a hand with an opening balance adjustment.

My accoting software has certain balances which are different from my final account balances.

I'm wondering about the different variables I have to consider when attempting to balance my accounting system through a journal to bring them back into line.

The differences are in a slight VAT over-credit, an over credit in payables, and it appears an understatement in Accrual's in the accounting software.

I've attempted to simply balance out these differences using a journal as discussed however it doesn't seem to be that all the variables in the balance sheet can make the journal balance. 

I'm not familar with the retained earnings in this fashion; I'm wondering how should I treat this in a journal to see if it is what is bringing me out.

I'm wondering is it a case of simply adding up the profit minus the expenses, and if so, do I add this to the prior year retained earnings in an attempt to make the accounting software retained earnings match this new conjoined figure. Additionally, when taking into account expenses, should I take into consideration tax paid post accounting profit?

A further question: Is the difference in provision for corporate tax something to consider here, and there is a dividend sitting in both tbs; should I have to take this into consideration when considering the retained earnings?

Thanks for any help as offered in advance.  


Replies (6)

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By SXGuy
09th May 2019 09:05

Posting as Anonymous, will get you no help, theres no reason to hide your identity.

secondly, it appears you need to pay for an accountants advice, because reading your post, its clear your not sure what you are doing, and id hazard a guess that the accounts are probably wrong anyway.

lastly, although we may feel nice enough to help with simple queries, we don't work for free, and what you have asked sounds to me like advice you should be paying for.

Sorry if that seems offensive, but this site is meant to be for helping professionals, not tax payers, and you wouldn't expect a plumber to explain how to plumb a new toilet in, and furthermore, wouldn't expect him to do it for free either.

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Replying to SXGuy:
By rjmorg111
09th May 2019 21:56

I'm a trainee actually was just having trouble with something, and no one in my office was able to help due to other reasons. It was a legitimate question I thought.

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By johngroganjga
09th May 2019 12:55

You are over-thinking.

Put your two trial balances side by side - i.e. the one in your system and the notional one that agrees with your accounts. Compare them line by line. Where there is a difference note down the entry required in your system to make it agree. The journal entry to post is the sum of the figures you have just noted.

Thanks (1)
Replying to johngroganjga:
By rjmorg111
09th May 2019 22:00

Thanks John, unfortunately it's not a simple cut and dry opening adjustment. I've done a few and that has resolved things, it seems no matter what I do i.e. even taking into consideration the prior year tb and compare them up, I can't find enough debits to balance it out.

Everything seems to tie in correctly, it's driving me insane. I'm thinking there is something buried in a nominal code that could be the cause but I doubt that would have passed the prior year checks.

Thanks for your reply.

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Replying to rjmorg111:
By johngroganjga
09th May 2019 23:01

You’re not doing it properly then. If your two TBs balance, then so will the differences between them when you turn them into a journal entry. It’s simple arithmetic.

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By Matrix
09th May 2019 17:27

The accountant who prepared the accounts should give you the journals to make.

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