Balancing account problem?

Question

I will try to explain the problem.

I have any Ebay business. In the last days of this financial year, I transferred some money form my paypal account to my bank account. So, the money was actually subtracted from my paypal balance before the end of the year. Now the money did not clear into my bank account until after the start of the next financial year. So, at the end of this financial year the transferred money was neither in my paypal account nor my bank account but somewhere in the ‘void’ between them.

Now, I have worked out my accounts for this year and have got them to balance perfectly but in order to do this I had to subtract the money I transferred from my total sales for the year.

Should I have subtracted this figure from my total sales for the year or should it go somewhere else? I want to make sure it goes in the right place on my tax return form.

Answer 1

I would ask an accountant to help balance your books than the folk on Yahoo Answers.

Be safe not sorry or the Taxman will be on your case if you forget to declare income that was missing between the Tax years

Answer 2

No you shouldn't have have done that, you should have debited cash In Transit account or bank Contra account in your books. The money in transit is an Asset to you. The tax man will understand

Answer 3

you should have not subtracted it from anything.  accounting is all about debits and credits.  all debits and credits have to balance. sales is a credit account,  assets are debit accounts.  add it back and create another asset account called money in transit.    good luck