- Original Poster
- #1
Hi,
I took over the bookkeeping of a company about three years ago, and I inherited the Quickbooks account that was set-up by the current accountants for the company. I noticed that the VAT suspense and VAT control account on the balance sheet bear no resemblance to what they should be. The VAT suspense account has a large credit balance, and the VAT control account has a large debit balance. Furthermore, there's also a VAT liability account that was set-up when by the accountants when they set-up Quickbooks about five years ago, but this account is never used, but still contains a sizable credit balance.
I'm not concerned about the actual VAT submissions, I know that they're all correct. I'd just like to sort out the balance sheet though.
Am I right in my understanding as follows? After you've submitted the VAT, the suspense account will show whatever value the VAT payable or receivable is? And after I have recorded the payment of the VAT (or recorded the refund), the suspense account should be zero? And after you submit the VAT, the VAT control account will either be zero, or consist of the net VAT from any transactions that occurred in the following VAT period?
Assuming I'm correct with the above, I can quite easily work out what the correct figures should be for each account. However, what's the correct procedure to bring them to their correct balances? I notice that there's a reconciliation discrepancies account. Can I use that to post the excesses to? I'd like to get rid of the VAT liability account too, as it seems to be quite meaningless!
By the way, I can ask the accountants, but I wanted to do some research first.
Thanks for your advice.
I took over the bookkeeping of a company about three years ago, and I inherited the Quickbooks account that was set-up by the current accountants for the company. I noticed that the VAT suspense and VAT control account on the balance sheet bear no resemblance to what they should be. The VAT suspense account has a large credit balance, and the VAT control account has a large debit balance. Furthermore, there's also a VAT liability account that was set-up when by the accountants when they set-up Quickbooks about five years ago, but this account is never used, but still contains a sizable credit balance.
I'm not concerned about the actual VAT submissions, I know that they're all correct. I'd just like to sort out the balance sheet though.
Am I right in my understanding as follows? After you've submitted the VAT, the suspense account will show whatever value the VAT payable or receivable is? And after I have recorded the payment of the VAT (or recorded the refund), the suspense account should be zero? And after you submit the VAT, the VAT control account will either be zero, or consist of the net VAT from any transactions that occurred in the following VAT period?
Assuming I'm correct with the above, I can quite easily work out what the correct figures should be for each account. However, what's the correct procedure to bring them to their correct balances? I notice that there's a reconciliation discrepancies account. Can I use that to post the excesses to? I'd like to get rid of the VAT liability account too, as it seems to be quite meaningless!
By the way, I can ask the accountants, but I wanted to do some research first.
Thanks for your advice.
