I've done the accounts and self assessment for a sole trader. As part of his expenses he used his car to travel to a trade show so put in a mileage charge. He hasn't taken the money for this but I have put the charge as an expense in the P & L. I haven't issued the client with a balance sheet even though I have produced one.
The balance sheet balances but I haven't put the mileage charge as a creditor.
If I add it in as a creditor on the balance sheet where would the debit entry on the balance sheet sit?
Sorry for the dumb question but sometimes I do struggle with these kind of things and I am struggling to get my head around it.
Normally I would debit P & L and credit BS but this credit entry isn't in and the balance sheet balances!
-- Edited by Elaine R on Tuesday 19th of November 2013 08:57:41 PM
Found it. It's gone against the capital introduced. Phew. I thought it probably had gone there but I was looking for a different amount. Its included in the balance that has other items in there also
I do worry about myself sometimes.
Thanks for diverting me back to the Capital! Oops and only just seen your post about Dr P & L and credit capital.
Elaine
-- Edited by Elaine R on Tuesday 19th of November 2013 09:52:06 PM
dr mileage in P&L and cr capital introduced in balance sheet, there wouldn't be a further entry. Maybe you hadnt debited the p&l and so profit was overstated?
well if it balances then the credit must have been put somewhere, I would suggest checking out capital introduced (maybe check if an erroneous credit has been put against drawings). Can you ask the person who prepared it?
I've been wracking my brains all night trying to get my head around it.
I am used to dealing with accounts on software and this had been done on spreadsheets so it's back to basics.
It's only £144 but it's more about me learning how to do balance sheet correctly and more so manually produced accounts as opposed to accounts done using software.
I was thinking of putting all the transactions through Sage so I could see how it all came out if I had done it using software.
