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Benefits Of A Financial Statement

 

Your debits and credits in your accounting will be like nothing if you are unable to turn them into financial statements. The first piece of data needed to construct these statements is account balances for all assets, liabilities and also owner's equity. In order for you to construct the  financial statements you will have to get the owner's equity on both revenue and expense so that you will have accurate data on this. The  financial statements will be easy, you can be able to construct them by using the general entries that comprise of trial balance, income statement and also the retained earnings, you will also need the balance sheet for this one.

 

Working on all  Financial Planning, you will have to begin with the trial balance. All of the statements will be built the accounts in the general journal. The trial balance statement is constructed for one purpose and that is to help the owner see the debits and credits he or she has in a certain period of time. Make sure that you have the three major details before you construct the trial financial statement, you will need the trial balance of course and the name of the company and also you will need the date when it was issued. The professional will have an easy task for this one, he or she only need to put the accounts in the lists of debits or credits that will be in the correct column. The total of each column will be added up in the trial balance. This will only be correct if the accounting your company has done will be correct and will have the same details. You will have to make sure that there were no listing balances that were on the wrong side because human errors will really deal a huge damage to a accounting endeavor.

 

An income statement will help a company determine the total money being spent and also earned. You will need the same thing from the trial balance at http://stbookkeeping.com/about/, you will have to get the company name, the date of the statement and also the name of the financial statement. But you will have to do some minor changes, the date should say "for year ended month day year". You will have to work on similar methods, you will need the owner's equity accounts that have the revenues and the expenses. You will have to list the revenue account first because it will most likely have a credit balance and put the expenses next which will most likely have the debit balance. And the professional will only have to subtract the revenue total to the expenses total and the number you will get will be the net income.

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