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Justa


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Opening balances yournal entries
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Hi all

I am new to this and wonder if someone could help me with a journal entries. I have a trial balance for YE 2018 and need to prepare a journal entry with opening balances:

AccountDescriptionDebitCredit
    
1Sales 81,376.00
27Purchases7,937.00 
53Subcontractors27,280.00 
231Office260.00 
232Insurance3,230.00 
263Telephone545.00 
264Post and stationery489.00 
267Motor expenses2,261.00 
285Accountancy1,675.00 
378Bank charges218.00 
390/14Depreciation of tangible fixed assets/ Motor vehicles1,989.00 
525/1Motor vehicles cost17,692.00 
525/21Motor vehicles depreciation b/f 9,737.00
525/22Motor vehicles charge for year 1,989.00
526/1Computer equipment2,072.00 
526/3Computer equipment disposal 2,072.00
526/21Computer equipment depreciation 2,072.00
526/23Computer equipment eliminated2,072.00 
586Trade debtors655.00 
692bank account45,085.00 
735VAT 3,733.00
786Accrued expenses 1,675.00
985/1*1Current account PH brought forward 44,088.00
985/2*1Capital introduced PH 6,185.00
985/21*1Drawings PH39,467.00 
    
    
  152,927.00152,927.00

 

What would be the opening balances youyrnal entry to start with the accounts for YE 2019.

I would appreciate it if someone could help with this please.

Many thanks



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BMM


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Any adjustments to do prior?



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Justa


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Hi BBM No adjustments, if you could help that would be brilliant. Thank you kindly Justa

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BMM


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Does the software not do it auto?

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Justa


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Hi, no the accounts for previous financial year were prepared on a spreadsheet but now switching to Free Agent and balanxes must be entered. Thank you

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BMM


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enter as closing balances on last day of period. Then software will roll P&L items. See individual software instructions for setting up balances for debtors/creditors and bank

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Justa


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I thought you prepare a journal for the items from balance sheet.

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BMM


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You could. where is the bal sheet? who has prepared it?

but best practice, use TB

still enter it on the last day when using new software. still care re the bits I mentioned.

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Justa


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Hi again, I have been asked to create a journal, so I cannot enter closing balances instead. Can you please help with this with the information I provided. Thank you

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BMM


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Your trial balance can just be a journal, you have debits and credits and they balance.



Your journal

Key on last day
Reference o/bal
Sales. £xxx. Credit
Sales code in software if it has one xxx
List the rest of your credit balances

Purchases £xxx. Debit.
List the rest of horn debit balances


Key creditor, debtors and bank to suspense code
Make sure they balance


Remove suspense balances, by keying as per freeagent instructions. Eg debtors, key as individual invoice or credit notes with extra references to show invoice number outstanding etc, to indidual customer accounts on last day of period. That way they show correct customer balances so you can issue still issue statements to customers and clear down the correct invoices when payments come in.
Also, prepare an opening trial balance from what you have, by moving all the expenses and income to retained profit and then once the above journal has been processed the trial balance on the first day of the next period in freeagent should agree with your manual tb.
www.aatcomment.org.uk/audience/students/how-to-successfully-extend-a-trial-balance-level-2-study-tips/

You will have adj. eg accruals to clear



-- Edited by BMM on Wednesday 19th of August 2020 09:06:03 AM

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BudgetB


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Hi Justa,

How much bookkeeping experience do you have?



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Jenny

 

Responses are my opinion based on the information provided.  All information should be thoroughly checked before being relied on.

 
Justa


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Hi BBM Thank you for your time and advice. I appreciate it.

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