Hi
I was not sure how to treat the out-of-pocket expenses in my previous accounting period at the time of doing the year-end and knew at that stage that it was incorrect. I now know what to do but would like to correct my previous year. I did go to the year-end journal and modified it to clear account 7016 (Directors Expenses Refund) by debiting this account and then added the different expenses into the correct account codes. My journal’s total changed and of course balanced but what I don’t understand is why the adjustments is not reflected on my balance sheet for that year ie. 30/06/2014. Your help will be appreciated. Sonnet
The balance sheet reports only on codes within the range 0-3999. So if your change didn’t effect any of these codes it wouldn’t have made any change to the balance sheet.
I’m sorry, my mistake. I meant no changes on the P & L.
Sonnet
What exactly is the date range you’re putting into your P&L? Did you drill down onto 7016 to see what entries are making up that balance?
The date - 1/7/13 to 30/6/14 and yes to question 2.
So initially I created purchase Invoices for the out-of-pocket expenses and used Directors Exp. Code 7016 to be able to pay the out-of-pocket expenses to the directors of the company. I am now trying to correct that co code 7016 should be zero on the P & L and the correct expenses codes should increase by that amount.
To correct that I modified the year-end closing journal and debited 7016 and credited the different expense codes I should have used initially.
As far as the transaction behind the P&L balance for 7016 it all seem to tally. I did however notice that you debited and credited 7016 on your year-end journal by the same amount.
I did - to clear 7016.
I guess It would be easier if I delete the year-end journal and then fix the problem and so if I do this, do I just re-do the year end like from scratch.