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Contra account and bank account not correct

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Experienced User RowenaBGIA
11 Posts
Experienced User
New Zealand
RowenaBGIA
Experienced User

11Posts

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Contra account and bank account not correct

Hi there. Just wondering if I am entering details in correctly for contra accounting in MYOB Essentials

Our situation is that some of our customers are also suppliers.

 

I am wondering if I am using the contra account incorrectly.

 

An example is a customer was invoiced $8,941.39 (Incl) and then we received a bill from them for $1,544.45 (Incl)

They paid the offset amount of $7,396.94 into our cheque account.

 

How I have been entering this is as follows;

 

I transfer the amount received ($7,396.94) into the contra account.

I then enter the total amount of the invoice as being paid in full  ($8,941.39) into our contra account

I then pay the bill from the same client from the contra account of $1,544.45

 

When I reconcile the accounts, the contra account is showing a balance of $7,396.94, and my bank account is off by this balance also.

How do I reconcile both the bank and contra accounts as I thought that a contra account should always be zero?

 

Any assistance would be greatly appreciated!!!

3 REPLIES 3
Ultimate Cover User bungy15
847 Posts
Ultimate Cover User
Australia
bungy15
Ultimate Cover User

847Posts

703Kudos

144Solutions

Accepted Solution Solved Solution

Re: Contra account and bank account not correct

Hi @RowenaBGIA 

 

You’ve just got the transfer part around the wrong way. You need to transfer FROM the contra account and TO bank account. 

 

The payment received goes into the contra account. 

The payment made comes out of the contra account.

Leaving the balance of $7396.94 in the contra account so you need to take it out. This will give the contra account a zero balance and deposit the money into the bank account for reconciliation.

 

Hope this clarifies it for you 

Tracey 

 

Experienced User RowenaBGIA
11 Posts
Experienced User
New Zealand
RowenaBGIA
Experienced User

11Posts

2Kudos

0Solutions

Re: Contra account and bank account not correct

Thanks Tracey Smiley Happy 

Ultimate Cover User bungy15
847 Posts
Ultimate Cover User
Australia
bungy15
Ultimate Cover User

847Posts

703Kudos

144Solutions

Re: Contra account and bank account not correct

You’re welcome @RowenaBGIA 

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