So, just to make sure I get it right. If AR is amount A and AP amount B at the beginning of the financial year, I do the following:
* As soon as I receive the amount A (invoiced the previous year), I put it in as a GL transaction with credit AR and debit bank? * As soon as I receive the amount B (bought the previous year), I put it in as a GL transaction with debit AP and credit bank? Right? Marius Kjeldahl wrote: > I just figured it out. AP and AR should become zero as nothing is outstanding. > This makes perfect sense to me now, but I had some trouble placing the right > numbers initially at the beginning of the year, since I did not start from > scratch I took over the books mid-year and have "full control". Full control > means the bank account matches invoices perfectly, possibly skewed by the > starting numbers. Now I'll just post some of the invoices towards AR/AP instead > of the bank, and everything should be fine. > > Thanks for the lessons anyway. > > Marius K. > > Finance wrote: > >>I suggest you check which exact invoices where outstanding at the >>beginning of the year, and check HOW you booked the payment of those >>invoices. (Chances are you coded the payment to costs) >>Then correct that by booking the payment debit on Accounts Payable >>instead of debit on costs or wherever you put them. >> >>(Assuming you paid those invoices by now. >>Otherwise they are well overdue and you will be receiving very >>unfriendly letters etcetera..) >> >>BTW: Bank and AR versus AP and common shares? No 'Retained Earnings' on >>the credit side as well? >>Common shares is a normally a fixed amount (x shares at value y) and NOT >>a 'balancing account'. >>Your friend may know more, but does he know enough? >>Accounts are no joking matter, ask anybody who ever went bankrupt! >> >>Grtz, >> >>Paul > > > -- Mvh, Marius Kjeldahl
