Hello, I've been looking at this for too long and now my head is all muddled.
I use Liberty Accounts and started here mid way through a financial year. It was the first time the system had been used so I had to enter all opening balances. This has led to a large balance in the suspense account which I now need to clear as it's our end of year.
So I have, for example, a debit balance in the suspense account for the bank account balance as at end of the previous financial year. What is the journal I need to write to clear this? It's obviously cr suspense but dr what?
I also have a debit balance in the suspense account for corporation tax payable. Again what's the journal for this?
Sorry if I'm asking you to teach me to suck eggs - I'm tired now!
A bit tricky without more detail, and I am not familiar with Liberty Accounts but if it is like most of the accounting packages, it automatically posts opening balances opposite entry to the suspense account. If all the balances entered, left a DR/CR balance in the suspense then I suspect the opening balances didn't include the Share Capital, and/ or Reserve Capital amounts.
If, for example you entered the CT payable as a creditor, you would have credited the CT Liability account, which would have automatically entered a debit balance on the suspense account. If there was a debit balance in the suspense a/c for the bank then there would have been an overdrawn bank balance credit entry opening balance.
Not sure on Liberty as never used, but I would have thought the following would clear it..
Cr Suspense a/c Dr Bank a/c
Cr Suspense a/c Dr CT Liability a/c in the balance sheet. Should be one set up already and I imagine that the CT has been paid so probably a code with that payment in it to offset the adjust you will make.
Opening balances shouldn't generate suspense items so it looks like it someone wasn't too sure either when it was all done or the program itself couldn't find the relevant code for it and just dumped it in suspense.
With regards to the bank, I would double check the previous year closing bank rec to ensure it that the adjustment you are making is correct.
