Help: The last bookkeeper doing my clients books included an £3025 accrual at the year end 2011. The accual amount paid in 2012 is £2733. How do I account for the difference. I use VT transaction+
If the 2011 accrual of £3025 relates wholly to the £2733 paid in 2012 then it an overaccrual in 2011 to be reversed in 2012.
Assume that is an accrual for say purchases then in 2011 the journal would have been
Dr Purchases £3025
Cr Accruals £3025
In 2012 the journal to record transaction would be
Dr Purchases £2733
Cr Bank £2733
Dr Accruals £3025
Cr Purchase £3025
Therefore in 2012 you have a net credit to purchases of £292 (£3025-£2733)
Taking 2011 and 2012 together total to purchases is £2733 (£3025 accrued in 2011 + £2733 paid in 2012 - £3025 2012 accrual reversal). Therefore you have the correct total but just a misallocation between years ie £3025 in 2011 and (£292) in 2012. Which is the whole point of accruals/prepayments (to allocate income and expenditure to the period to be recognised irrespective of when they are paid/received).
Dont use VT transactions+ so cant advise of how to process. But the above is the theory.
