Chart of Accounts Refundable Overcharge
by Dave Black
Chart of Accounts Refundable Charge
In a small non-profit making set-up, in the year 08_09 I charged a client for £300.00. Neither I nor my client had noticed this at the time.
I now find, preparing my annual accounts, that the amount charged should have been £250.00 (an overcharge of £50.00).
I do not want to show this as Income & Expense profit for 08_09, but would rather credit the client towards a future payment – keeping the ‘refund’ at asset level.
I have never met with this type of ‘negative number’ problem before. How do I do this in an accrual double-entry accounts system, and account for this on the chart of accounts and balance sheet?