The Stock Evaluation Report is a critical tool for reconciling nominal ledger accounts against actual ledger balances. This guide explains how to generate and use the report, interpret the results, and address potential discrepancies.

Steps to Generate the Reconciliation Report

  1. Access the Report:

    • Navigate to:
      Accounts > Nominal Ledger > Reports > Reconcile.

  2. Select the Date:

    • Choose the date for which you want to run the reconciliation report.

  3. Run the Report:

    • Click Report to generate the reconciliation.

  4. View Details:

    • The report will display overall values.
    • To view a detailed breakdown, double-click the relevant line item in the report.

Key Points

  • Reconciliation Check:

    • The reconciliation should always equal zero.
    • This ensures that the balance on the nominal ledger matches the balance on the actual ledger.

  • Understanding Discrepancies:

    • If the reconciliation does not equal zero, the control accounts may be out of balance.

Common Cause of Discrepancies

  • Manual Nominal Journals:
    • One of the primary reasons control accounts go out of balance is the use of manual journals.
    • Manual journals affect the nominal ledger but do not update the actual ledger, leading to discrepancies.

How to Resolve Discrepancies

  • Review Manual Journals:
    • Check for any manual journals posted to the nominal ledger that might not align with the actual ledger.
  • Adjust Entries:
    • Make necessary adjustments to ensure both ledgers align.
  • Monitor Processes:
    • Limit manual journal entries to reduce the risk of discrepancies.

Scenarios Where This Process is Useful

  • Verifying that stock balances are accurately reflected in the nominal ledger.
  • Investigating discrepancies between nominal and actual ledgers.
  • Ensuring compliance with financial reporting standards.