When the IRS comes a calling, I'll send the bill to the guy who wrote
the reposting script :p But in all seriousness... I think you are
absolutely right on all accounts.
I've been noticing small changes primarily in sales, inventory, cogs,
and obviosuly net income and retained earnings... oh and sales tax.
Nothing I can really do about it anymore.
On 1/19/2011 12:31 PM, Paul Tammes wrote:
I think it means that in 2003 inventory was 62k, which seems a correct
or at least reasonable number if I understand you correctly.
And in 2011 inventory as per 2003 seems to have grown to 343k.
That can not be right: inventory does not grow between 31 december
2003 and 31 december 2003.
So it would seem the reposting script messed up big time. Maybe the
COGS where not charged (or not charged right) to the Inventory account.
Maybe the reposting script used 2011 price levels for 2003 inventory
and invoices.
Maybe the 2003 hardware can be considered antique and has a matching
price level.
Look up the price of a 1Mb SIMM (no, not Dimm, Simm, and no, not Gb,
Mb). Was 5$ in 2003, now is more like 50$.
When e.g. you do NOT enter the beginning balance using an invoice, the
COGS of sales would be zero, botching both results and inventory in
one simpel step iirc.
However, without a thorough investigation as to the details of
inventory, sales and results over the past years (2003 up to now) it
is hard to make any serious comments or statements.
I hope (trust) your results and books have been audited at some point
in time during those years. Bookkeeper, accountant, IRS, anybody?
Errors in one Account on the Balance Sheet tend to have a counterpart
in another account.
That can be either a balance sheet account or a profit and loss account.
The fact that the current balance sheet shows the right figures (in
your opinion) is a good sign,
I would skip the fun part, close the books and enforce transaction
reversal for all dates before say 2010 or 2009.
Tip: use reposting scrips on test database first! And use backups of
the original database if e.g. IRS turns up and wants to audit 2003!
For arguments sake, say they should believe the reported value of 62k
was wrong and should be 343k.
One might come to the conclusion your profit for the year was
understated by some 271k.
Hth,
Paul
2011/1/19 Jeff Kaminsky <[email protected] <mailto:[email protected]>>
I ran a reposting script back in 2009, which mediocre results.
For fun today, I ran our 2003 balance sheet which states 62k in
inventory (which seems reasonable), but when I looked at my actual
inventory account, it shows 343k which is an unreasonable number.
I looked at todays's balance sheet and it matches our inventory
account exactly. What does it mean?
Jeff
--
Jeff Kaminsky
Sr. Accountant
IX Systems
408-943-4100 ext 122
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--
Jeff Kaminsky
Sr. Accountant
IX Systems
408-943-4100 ext 122
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