Working On Your Financial Statements
Your debits and credits in your accounting will be like nothing if you are unable to turn them into financial statements. You will have to work on pieces of data about account balances and assets that the owner will have before you can turn them into financial statements. The equity of the owner will comprise of revenue and expense accounts that will be very important in making these financial statements. You will need the trial balance and income statement for making the financial statements and also the balance sheet and retained earnings, this is because you really have to work on the detailed pieces of information.
The basic statement you will need to take care of is the trial balance. All of the statements will be built the accounts in the general journal. The trial financial statement is constructed to help the owner see the credit and debit he or she has in a certain period of time and if they have already been accounted for. 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. This will be an easy task for a professional, it will only mean to simply list the accounts and put them in the appropriate debit or credit column. All columns will be added up and to the bottom in the trial balance and will be labeled as total. 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 is the best way of getting the exact amount of money you are using and coming in for your company. You will need the same thing from the trial balance, you will have to get the company name, the date of the statement and also the name of the financial statement. However the format of the date will be different from the trial balance. 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.The Path To Finding Better Experts