Hi, I have been trying to finalise the accounts ending period March 2017 and noticed that the Trial Balance report shows a journal entry for the period ending March 2016 which my accountant said is wrong. How to get rid of this entry. I locked my previous accounting period and set the start date from 01/04/2016. Please see the screenshots.
First is the Trial Balance and second is Owner’s Equity where I cleared the expense claim.
Please guide me if I am doing something wrong.
Any help appreciated.
Where did you clear the Expense Claim from - Liabilities > Expense Claims account ?
Perhaps you could click on Edit for that Journal and post that screenshot, because what ever you did in 2016 you have also done again in 2017.
Also, your Trial Balance shows under Equity both Capital Accounts and Owners Equity - you should only have one. Perhaps the Journal should have gone to Capital Accounts + sub account and not Owners Equity.
Now this maybe perfectly ok, but your capital accounts shows a debit balance which indicates that you either owe money to the business or have overdrawn from it. Neither is an issue, just that is what the accounts are reading.
PS: The Trial Balance date range should be 1/4/2016 to 31/3/2017
You don’t change the Start Date when you start a new year, the Start Date should represent the date you started with Manager and it never changes. For a new year you change the Summary tab Set Period dates.
I also notice you have both a capital account and owner’s equity account. The owner’s equity account implies you are a sole trade/proprietor. If that is true, you should have one or the other, not both.
Thanks, Brucanna and Tut for your prompt replies. Appreciated. The Trial Balance date is 1/4/2016 to 31/3/2017. Please see the screenshots for Trial Balance and journal entries. I am a sole trader. As suggested I will remove owners equity and will use capital accounts only. But when I clear the expense claims in owner’s equity, the problem still exist as it shows the expense claims for the year ending 2016.
As far as the start date is concerned I set the date on the summary tab. Hope I have answered your queries.
To be honest I don’t see the problem here. Balance Sheet accounts are perpetual accounts.
The dates you put into the trial balance report is to control the contents of the P&L proportion of the trial balance, i.e. you only want to see the income an expenses values for that period of dates.
You click on any other Balance Sheet account such as “Cash at Bank” or “Accounts Receivable” and you are going to see 2016 entries. These aren’t wrong.
My understanding was that Trial balance should show only the entries between 01/04/16 to 31/03/2017. Entries for earlier period confuse the accountant as when he work out profit. All screenshots are related to trial balance for the period from 01/04/16 to 31/03/2017.
No, they won’t. If they do, get a new accountant. A trial balance is a top-level check to show that the books balance. The accountant will work from the Profit and Loss Statement, not calculate profit from the trial balance. In fact, trial balances are left over from the days of manual accounting and are not anything you really need with a computerized system. Many owners/managers and accountants never produce one. There should be other clues that mistakes have been made if they occur.
Also, since you are using expense claims, be aware that as a capital account owner, you automatically are defined as an expense claims payer. Expense claims entered for you as a capital account owner post directly to your capital account rather than Expense claims and do not have to be cleared. See this Guide: Manager Guides.
I have amended the expense claims accordingly.