Closing Stock

Issue

Closing Stock in the Profit and Loss account does not equal in the Balance Sheet.

This format error occurs when there is a mismatch between the postings to the relevant stock codes on the Profit and Loss Balance Sheet.

To resolve this issue, please follow the steps below:

Resolution

1. There are only 7 nominal codes which are used in resolving this format error. Those are nominals 121, 701, 702, 702.01, 703, 704 and 705.
2. Amounts posted nominal 121 in the current year, must match the combined total of amounts posted to 701, 702, 702.01, 703, 704 and 705 in the current year when the balance sheet postings are multiplied by -1. The same would apply for amounts posted to 121 in the comparative year, they must match the combines total of amounts posted to 701, 702, 702.01, 703, 704 and 705 in the comparative year.
   

   Formula as follows; (All current year)
   121 = 701 + 702 + 702.01 + 703 + 704 + 705

   Formula for comparative year; (All comparative year)
   121 = 701 + 702 + 702.01 + 703 + 704 + 705

   Here we can see that -€ 1,000 has been posted to nominal 121 in the current year and a combined total of € 700 has been posted to 701 and 702 in the comparative year. This leaves a mismatch of € 300, as the system will automatically multiply € 700 by -1 to give -€ 700.

3. In order to resolve this difference, an adjustment journal must be posted, adjusting either the profit and loss nominal code 121, or any balance sheet nominal codes in that range.
   Nominals 701.01 is not included in the calculation as this nominal code is to be used for non-trading stock. If you have an amount posted to 701.01 it should not be included in the total posted to 121 as this stock does not trade. 
4. If new nominal codes have been created within this range, right click on the nominal code and select Open. Check for the Copy from Code option, if the copy from code falls within the range listed at step 1, you will need to include the balance of that nominal code in the calculation. 
5. If, having carried out steps 1 to 3 correctly, but the format error has not cleared, you will need to run a recalculation to update the balances. Navigate to Tool > Utilities > Recalculation. When the routine is complete, re-run the accounts.
6. If the format error is still showing on your accounts, please contact a member of the support team.