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Nikole


Senior Member

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Pre - Payment
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Good evening all, 

Today I have been looking at the management monthly accounts and accruals and pre payments and one entry has baffled me. 

Vehicle insurance invoice dated 1st September for 12 months from July to Aug 19. 

Pi has been entered and paid in October. 

Accruals have been posted for July and August. Then the previous bookkeeper has posted a further accrual and pre payment for the whole invoice in the same month as the other accruals. Why would she post this addition accrual/pre payment as I'm totally confused. 



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Cheshire


Master Book-keeper

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Hi Nicola
Reading this - the insurance is for a 14month term? (assumed 1 July to 31 August)

Which leads me to assume the previous insurance ran out end of June, hence the two accruals in July and August (invoice as yet not received).

Another assumption - September accrual is because the invoice has not been entered until October (you said 'entered and paid October', which presumably is because she had locked down the accounts for September. If she hadnt locked down the September month she couldve just entered the invoice in September and prepaid from there.

Hope Im making sense!!


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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Nikole


Senior Member

Status: Offline
Posts: 240
Date:
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Hi Joanne,

Apologies, the invoice is from August 18 to July 19. Invoice prior to this reconciles with pre-payment.

Invoice is dated 1st August but she has dated 1st September - not sure why. Invoice was received in September which would explain one of the accruals but not two accruals so i can only presume she duplicated. Accrual figures are not even correct. Upon checking there has been no month end performed since July so again not sure why she has accrued the whole invoice.

I managed to speak to the Accountant to see if they had asked her to post the figures she had posted and they haven't so i have reversed everything that is incorrect and started again.

I am the fourth Bookkeeper this year :/

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