Apologies in advance if this is a daft question and I should really know the answer to it but am not feeling 100% confident.
I am working on some ledgers where some of the prior year figures are incorrect. I have spent some time agreeing figures to the HMRC website so now need to post journals to correct HMRC liabilities etc that were shown in the prior year accounts. ( Its a small company and they do not have to have audited accounts so as a result they are not 100% correct !) If my VAT liability is understated or any other tax liability is under/over stated do I put the opposite side of the entry to retained earnings please?
Is this a Limited Company? If so, have the accounts for the previous year been filed at Companies House and agreed/signed off by the Director(s)? Even if the accounts do not have to be audited I would have thought that the accountants would have made sure that the figures were correct, and you need to speak to them before making any journal entries to correct prior year's figures.
