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Hi,

I need help to correctly adjust my Trial Balance and this is my query:

We moved into our offices and paid a deposit (posted to n/c 1104 Rent deposit)

We received monthly invoices which included rent, power, service charges and VAT. As we paid these invoices in arrears I set up a Supplier Account and posted each invoice, apportioning each line of the invoice into their correct nominal codes (rent posted to n/c 7100 Rent)
We left the offices and were allowed to set off the rent deposit against rent due, so only part paid the last invoice.

My Trial Balance is showing the amount of the original deposit in n/c 1104
I could do a journal to transfer the amount from 1104 to 7100, but this will still leave me with a balance on the Supplier Account for the short paid invoice.

How do I clear the balance on the Supplier Account without disturbing the trial balance?

7100 is not where it wants to go, the rent was on the invoice. what you want to do is move it onto creditors control as you are offsetting it against an invoice.

There are several ways to do this. I would raise a T9 credit note against 1104 for the deposit amount of the suppliers account. The deposit nominal will be zero, the supplier account is zero, you just need to match the credit against the balance of the part paid invoice. *(If you are on cash accounting for VAT this method will not work)

Bruce,

Thanks for your advice.

Took me a while to get my head around it but it makes sense if I imagine 1104 (rent deposit) to be a kind of deposit account with my money in it. The credit note (n/c 1104) pays the rent invoice from this 'deposit account'.

Accountancy rocks!

Ron