I'm completing the books for a small ltd company in their second year of trading. Last year's accounts were filed by an accountant but I have discovered that the bank balance shown on the accounts is wrong - it completely omits an account that had a balance of £8000.
Something else must have been missed last year for the accounts to have balanced - were sales omited, purchases overstated or money from the directors loan not included? That's what worries me most, quite apart from the issue of what to do with the discrepancy in the accounts now.
In order to find out what else has been missing you would need to go through the bank balance of £8k and analyse how it has been made up.
It may be combined of one thing or a number eg may be that director introduced £8k or maybe a made up of sales of £14k and and purchases/costs of £6k ie (£14k - £6k).
Depending on what the other side of the entry is and the materiality on the accounts it might need to be adjusted as a prior year adjustment.
