offset Account

[Former Member]

Hi,

My client want to enter the opening balance entry for Customer,Vendor and G/L accounts.

Now i need to know where i have to Create the following offset accounts (Assets/Libility/Revenue/ Expenditure).

1. Offset Accounts Vendor

2. Offset Accounts Customer

3. Offset Accounts G/L

How this offset accounts get adjusted. Please let me know in detail.

regards

Suresh

[Former Member]

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[Former Member]

Because offset account is temporary account, you can create these 3 offset accounts if you have too many opening balance entries to start with. They can facilitate you for trial balance.

On the other hand, it that is not the case, Suda's suggestion will be more practical.

Thanks,

Gordon

[Former Member]

I would recommend you to create seperate Offset accounts for

1. Offset Accounts Vendor

2. Offset Accounts Customer

3. Offset Accounts G/L

4. Offser Inventory

You can create these Offset Accounts in the 'Equity' Drawer of Chart of Accounts.

Please consult with your Client Finance people regarding this.

[Former Member]

Hi Sridharan,

Thanks for your reply. But i need to know where you guys are creating this offset accounts and using.

And also i need to know how this accounts get adjusted in details.

regards

Suresh S

[former_member583013]

Suresh,

The accounts can be created in the Equity drawer or the last drawer (Other revenues and expenses)

If you understand how the debit and credits post in accounting...you will also understand that the balances will zero themselves out.

3 very important things to make sure

The Inventory G/L value which will be posted via Stock taking should match your legacy system's Inventory G/L total

SUM(Quantity x Cost) for all Items = Inventory G/L ............Recommended that you do physical inventory and make all adjustments in your legacy system before bring in balances

The AR Aging and AP Aging total should match your AR Recievable G/L balance and AP balance in the legacy system

Suda

[Former Member]

You can create these Offset Accounts in the 'Equity' Drawer of Chart of Accounts.

[Former Member]

Hi Suda,

Thanks for you reply. Can i create all the following 4 offset accounts in Equity Drawer itself.

1. Offset Accounts Vendor

2. Offset Accounts Customer

3. Offset Accounts G/L

4. Offser Inventory

regards

Suresh S

[Former Member]

They really not that matter where to put. You can put it there because most people used to it.

Thanks,

Gordon

[former_member583013]

Suresh,

I would suggest you create one offset account and use it for all. When you use the offset account to Import your Customer, Vendor, Item and G/L balances..it should automatically become Zero.

If you choose to use 4 offset account then at the end you will need to reconcile the 4 accounts to zero them out.

It is upto you.

PS: There are atleast 2 dozen threads on this Forum where this has been discussed. It is always a good practise to search the forum first. It is quite possible someone already asked this question.