Hello, I am in the process of preparing accounts for a client and 2 of the currency bank accounts(USD and EUR) are showing a balance in the balance sheet however in the bank accounts for the same date there is a balance of zero. Why are the bank and balance sheet showing different figures?
As the balance sheet is shown in GBP, it’s likely to be a discrepancy in the exchange rate.
Has there been any gains/losses recorded again the account up until now?
No not until now i have made an adjsutment in this year to take into account the currency however this has put the balance sheet at zero and the accounts now into a negative. These are not small amounts either.
They may not be small amounts, but if it’s built up over time, then this could be why it’s grown.
How did you enter the adjustment?
By using a journal entry. the bank accounts should be showing a zero balance.
I have also noticed another clients bank accounts are showing a considerably different balance in BS and bank accounts. Bank has been reconciled and is correct.
Was this just a standard journal entry, or was a currency gains/loss journal? The latter would adjust the GBP value for you, and is accessible from the bank account settings from the bank statement page:
A common issue that catches people out is the date. When comparing it to the bank account, are you looking at the same date on both?
If not, no problem, we can get a few details from you and take a look at it in a private message
having looked at how to record the loss/gain as you have shown above it takes me to a journal entry which is the identical to the entry i made to the correct nominal codes.
Yes both dates are the same.
It’s still a journal but it’s treated different. The difference is, the currency gains/loss journal will only adjust the GBP values and not the balance of the account.
Will send you a private message in regards to the bank balance.
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