I just prepared my own opening trial balance from last years accounts, and entered into sage. I used the first day of this financial year as the starting date.
Now that I am entering live data, I noticed that the figure displayed in the nominal ledger for rent is less the opening balance I entered?, ie £3,000 rent, accrural £1,000, therefore only £2.,000 shows in the accounts for quarter one.
When preparing the trial balance, I entered the accrural as a credit to rent (as it is a liability), and the debit to suspense. At the end of the trial balance the suspense was nil, so I assumed all the entries were correct
Could anyone offer some advise as how to correct this?
I need to debit rent for £1,000, but which account should I credit?
Your rent for the quarter would be correct, if you had an accrual, as the 3000 is for the quarter but it would seem that 1000 of that was for the last month of the last financial year?
Yes, I agree, they have paid a quarters rent of £3000 but £1000 related to the last month of the previous year.
To correct you would need to debit the nominal account for rent and credit accruals with £1000. I would re check the invoice you entered tho to make sure that this is correct and they are owing one months rent at the end of the quarter.
Yes but it will still only show 2000.00 rent for the period, as its a new financial year and the 1000.00 was owing for the last month of the previous financial year.
The DR rent a/c would not clear it but would show the balance as 2000.00
If the rent for the new quarter this year is £3,000, and shows as only £2,000 in the nominal ledger due to the credit entry of £1,000 opening balance, then by debiting rent £1,000 to clear the arrears, will this not work?
I am confused by what you said about the impact being reduction in bank balance.
If the invoice was £3000 and that is what has been paid then this is what should be recorded as the bank payment otherwise you will not be able to reconcile your bank?
As I said, if when you check your invoice it shows one month outstanding at the quarter end then your transaction would be DR Rent CR Accruals £1000. Your rent account would then show the £3000 balance?
