Prior year adjustment - The Book-keepers Forum (UK)

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TOPIC: Prior year adjustment

DONROAMIN1

Member

Status: Offline

Posts: 6

Date: Tue Feb 4 07:14 2014

Prior year adjustment	Permalink

Hello all any help with the following would be great please - Previous accountant has posted entries relating to year end 2011 - Included within the trial balance are CR 60k Commercial loan ( this was the original loan amount) DR 6000 to a balance sheet code to reflect the capital repayments made The 60k less the cumulative balance of 6000 on the debit side leaves an overall liability of £54,000. When I have checked the actual loan statement - the amount outstanding as at year end 11 was 48k and not 54K. The year end 11 Procedure has been run although as these are balance sheet entries they will not have been zeroed out. Do I just increase the repayment account DR by 6K and post the corresponding entry to adjustments on the CR side ? The bank was reconciled so even though the extra loan payments must have cleared the bank at some stage can't really adjust the bank which is why I have suggested the adjustments code - But then this adjustment is presumably rolled over to the new year and sits there forever more? Any suggestions please ? Thanks __________________

bro0010

Senior Member

Status: Offline

Posts: 115

Date: Tue Feb 4 17:06 2014

Perhaps the owner of the business (you didn't say if it was a limited company or not) introduced another £6k into the business by paying off some of the loan. Can you tell anything from other loan statement documentation about the timing of the unrecorded reductions? What has the owner of the business said about this?

__________________

Ian

Ian Brown FCA
Onion Reporting Software Ltd

www.onionrs.co.uk

Sage accounts in Excel to go. No set-up necessary.

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