Penny error double entry

Discussion in 'Accounts & Finance' started by Flux man, Aug 16, 2019 at 10:01 AM.

  1. Flux man

    Flux man UKBF Newcomer Free Member

    10 0
    Hello..a silly problem here.

    Invoice from supplier states eg £175.06

    They take payment direct from our bank themselves, but they take £175.04 (they probably use 2 different rounding methods)

    Obviously no one cares about the 2p... but i want my books to balance haha.

    So after paying, if my account are:

    Expenses--supplier A = DR £175.06
    Liabilities--payable = CR £0.02
    Assets--Bank = CR £175.04

    To which account do i credit the 2p so that the payable account is cleared?

    (I guess i could pay the supplier the 2p... but i'm thinking i can just send it to some "adjustment" or "rounding" account...or put it as income haha... or could i credit it to the expense account? (but then expenses wouldn't match the invoice amount...))

    Im not using software like sage etc.... i use a text ledger...old school.
    Posted: Aug 16, 2019 at 10:01 AM By: Flux man Member since: Oct 21, 2017
  2. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,696 2,353
    I'd credit the 2p to the expense account that the supply was for.
    Posted: Aug 16, 2019 at 10:19 AM By: MyAccountantOnline Member since: Sep 24, 2008
  3. Flux man

    Flux man UKBF Newcomer Free Member

    10 0
    Tru dat.

    And taxman aint gonna complain if i claim less expenses ;)

    Ta very much.
    Posted: Aug 16, 2019 at 5:49 PM By: Flux man Member since: Oct 21, 2017
  4. Victoria_V

    Victoria_V UKBF Regular Full Member

    111 15

    The best way to balance this would be to credit your expenses with the 2p by posting a dummy credit note of 2p to your purchase ledger supplier account. This will balance both the supplier account and your liabilities payable account.

    You could also post a journal by debiting liabilities payable and crediting expenses, but this will leave your purchase ledger supplier account with a 2p balance
    Posted: Aug 19, 2019 at 3:08 PM By: Victoria_V Member since: May 29, 2019