I’m setting up a new account for a small charity - how do I add property that was bought before I started so that it appears on the balance sheet? I expect it’s a Journal issue - I can see that I can add a ‘Freehold property’ Nominal Code entry (I assume the current value) but what do I debit?
You will need to input all the opening balances from the last Balance Sheet, which includes the freehold property. This is done via settings…all settings…set up your opening balances. You should choose the start date of the accounting period as the date.
Thank you, that’s helpful - but if go into the ‘Journals - Opening Balance Entry’ screen I can enter the value of the property in Nominal Code ‘0010 Freehold Property’ asa credit - but what balancing entry do I put below it?
Sorry if this is obvious, but I am not an Accountant!
There should be a code, such as 3101, Retained Profit & Reserves and this is where the credit entry goes
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If you’re entering a complete balance sheet from whatever previous system you used for book keeping before QuickFile then it should balance up anyway.
If you don’t have an existing balance sheet or trial balance then you need to think about where did the money come from to fund this property? If you were buying new property now chances are the value on the asset code (a debit, by the way, not a credit) would be balanced off partly by the deposit coming out of your bank account and partly by creating a liability on the account representing the mortgage. As you use income from the business to pay down the mortgage, that mortgage account will gradually become less and less overdrawn and the balancing credit for that will be part of your P&L, which moves to the “retained profit” code at the end of each financial year.
So if this is a property you bought a few years ago chances are that part of the balancing credit will be whatever you still owe on the mortgage, and the rest will be retained profit in the capital and reserves section.
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