Balance sheet control
To carry out end of period adjustments (also known as journal adjustments), each company must have a balance sheet control record. The control record defines the date adjustments are for and two accounts (Loans and tax prepayments) that need to be identified so they appear correctly on the balance sheet.
A warning occurs if adjustments are made outside the current period. Once the adjustments have been posted the end of period dates may be changed. They need to be changed manually as Professionals Retail Business does not "roll over" periods.
If there is no control record the New button is visible and active. It is invisible and inactive once the record has been created.
1. Enter a description if you wish. This defaults to "Balance sheet control for : etc".
2. Enter the income account for loans. If this account has not been created you can enter it after you have created the journal control record. The account must have G.S.T. disabled, and not be subject to tax. This account is important in dealing with loan accounts on the trial balance and balance sheet. You should only have one ledger account for loans. If you have a load account you must enter repayments as journal adjustments - as well as straight expense transactions. This means, during the year enter loan repayments as you make them. Then, at the end of the year total those repayments (use the transaction report) and make a single journal adjustment to credit that account and another to debit the loan account. This is required to decrease the actual value of the loan. You may need to have two loan repayment accounts - principal and interest. Make the adjustment based on the total value of the principal repayments, not the interest.
3. Enter the expense account for tax prepayments. This account must be set up in the same manner as the loan account. While not exactly technically correct it is a good idea to include all prepaid tax (GST, income tax, provisional tax) in this account. Your accountant can use the transaction reports to see the actual transactions breakdown.
4. Enter the beginning date of the current year or period. Retail Business does not use these dates for any other reason than checking that journal adjustments have the correct date for the trial balance and balance sheet.
5. Enter the end of period date.
6. Select the year range the period relates to.
Note: You can define each period as a month, or year. If defined as a month journal adjustments must be made on a monthly basis.