Thet

ri
albal
ance

I
tisal
i
stofcl
osi
ngbal
ancesext
ract
edf
rom l
edgeraccount
sonacer
tai
ndat
e.

Pur
poseoft
het
ri
albal
ance

 Conf
ir
mst
hatt
het
otal
ofdebi
tbal
ancesi
nthel
edgeragr
eewi
tht
het
otal
credi
t
bal
ances.

 Checkst
hatdoubl
eent
ryhasbeencompl
eted.

 Assi
stsi
nthepr
epar
ati
onoff
inal
account
s.

 Checkst
hear
it
hmet
ical
accur
acyoft
hel
edger
.

For
matoft
ri
albal
ance

 I
tispr
epar
edasatagi
vendat
e.

 Hast
wocol
umns,
thedebi
tsi
deandt
hecr
edi
tsi
de.

 Thedebi
tsi
deshoul
dal
way
sequal
thecr
edi
tsi
debecauseoft
hepr
inci
pleofdoubl
e
ent
ry(
dual
i
ty)whi
chst
atet
hatf
orev
erydebi
tent
ryt
her
eisacr
edi
tent
ryandv
ice
v
ersa.

 I
fthet
ri
albal
ancedoesnotagr
eet
het
empor
arydi
ff
erencesi
srecor
dedi
na
suspenseaccountandt
heer
rorhast
obef
ound.

 Howev
eri
fthet
ri
albal
ancebal
ances,
itdoesn’
tal
way
smeant
hatev
ery
thi
ngi
s
cor
rect.
Thi
sisbecausesomeer
ror
sar
enotr
eveal
edorshownbyt
het
ri
albal
ance.

 Thet
ri
albal
ancewi
l
l,t
her
efor
erev
eal
aner
rori
nthedoubl
eent
ry.

 I
twi
l
lshowt
hatt
het
otal
debi
tent
ri
esequal
thet
otal
credi
tent
ri
es,
i
tist
her
efor
e
usef
ult
oremembert
hatwedebi
t

a)Pur
chases

b)Expenses

c) Asset
s

 Toi
ncr
easet
hei
rval
ue

 Andwecr
edi
t

a)Rev
enue
 b)Li
abi
l
iti
es

c) Sal
es

Toi
ncr
easet
hei
rval
ue

Fi
nanci
alst
atement
s

 Thi
sist
hest
ageoft
heaccount
ingcy
clewher
efi
nanci
alst
atement
s,(
income
st
atement
s,st
atementofchangesi
nequi
tyandst
atementoff
inanci
alposi
ti
on)ar
e
pr
epar
ed.

 Thei
ncomest
atementi
spr
epar
edt
ocal
cul
atet
henetpr
ofi
tfort
hebusi
nessatt
he
endoft
heaccount
ingper
iod.

 Thest
atementoff
inanci
alposi
ti
oni
spr
epar
edt
oshowt
hef
inanci
alposi
ti
onoft
he
ent
it
y.

 Asset
s,Li
abi
l
iti
esandcapi
tal
inv
est
edar
eshowni
nthest
atementoff
inanci
al
posi
ti
on.

 Ast
atementofchangesi
nequi
tyi
spr
epar
edt
oshowt
heequi
tyoft
heent
it
yatt
he
endoft
heaccount
ingper
iod.

Af
ull
setoff
inanci
alst
atement
sconsi
stsof5component
s

 I
ncomest
atement(
tradi
ngandpr
ofi
tandl
ossaccount
)

 St
atementoff
inanci
alposi
ti
on(
bal
ancesheet
)

 St
atementofchangesi
nequi
ty

 St
atementofcashf
low

 Not
est
othef
inanci
alst
atement
s

Reasonsf
orpr
epar
ingf
inanci
alst
atement
s

 Tocal
cul
atepr
ofi
torl
ossf
ort
heper
iod

 Topr
ovi
dear
epor
ttot
heowner
soft
hebusi
ness
  Toshowt
hef
inanci
alposi
ti
onofabusi
ness

 Togi
vei
nfor
mat
iont
ost
akehol
der
s

 Tot
rackf
inanci
alr
esul
tsandcompar
ewi
thpr
evi
ousr
esul
tsandot
herbusi
nesses.

I
ncomest
atement

Thei
ncomest
atementi
sal
i
sti
ngofal
li
ncomeandal
lexpensesf
oranaccount
ingper
iod.

I
tcal
cul
atespr
ofi
torl
ossmadebyt
hebusi
nessf
oraper
iodbyt
aki
ngexpensesf
rom
i
ncome.

I
tispr
epar
edatadef
inedper
iodoft
ime.

St
atementoff
inanci
alposi
ti
on

 Thest
atementoff
inanci
alposi
ti
oni
sal
i
sti
ngofal
ltheasset
sandl
i
abi
l
iti
esofa
busi
nessonaspeci
fi
cdat
e.

 I
tshowst
hecapi
tal
oft
hebusi
nessbysubt
ract
ingt
hel
i
abi
l
iti
esf
rom t
heasset
s.

 Thest
atementoff
inanci
alposi
ti
oni
sasnapshotpi
ctur
esofabusi
nessatapoi
nti
n
t
ime,
usual
l
ytheendoft
hef
inanci
aly
ear
.

St
atementofchangesi
nequi
ty

 Showst
hechangesi
nowner
s’equi
tyov
eraper
iodoft
ime.

St
atementofcashf
low

 Showst
hesour
cesandusesofcashf
orabusi
nessov
eraper
iodoft
ime.

Not
est
othef
inanci
alst
atement
.

 Gi
vesdet
ail
edi
nfor
mat
iont
ocer
tai
ntr
ansact
ionsandf
inanci
alper
for
manceofa
busi
nessf
ordeeperanal
ysi
s.

 Thenot
esexpl
ainst
ransact
ionsandi
nfor
mat
ioni
ntheot
herf
inanci
alst
atement
,
act
ingasf
oot
not
es.

I
ncomest
atement St
atementoff
inanci
alposi
ti
on

 Pr
epar
edf
ort
heper
iodoft
ime  Pr
epar
edf
orapoi
nti
nti
me

 Cont
ainsi
ncomesandexpenses  Cont
ainsasset
s,l
i
abi
l
iti
esand
 capi
tal

 Measur
espr
ofi
tabi
l
ity  Showshowbusi
nessi
sfi
nanced.