ETB --> Balance sheet/P&L

E=mc2
E=mc2 Registered Posts: 12 Regular contributor ⭐ ? ⭐
Does anyone know of a way to learn what entries from your ETB are to go on either the P&L or the Balance sheet! I will be sitting my exams in June, and im struggling to remember which goes where!

Comments

  • visha
    visha Registered Posts: 218 ? ? ?
    Entries in Profit and Loss are for INCOME and EXPENSES.

    Entries in the Balabce Sheet are for ASSETS and LIABILITIES.

    When you look at an account (entry) and don't know where it goes!

    Ask yourself Is it an INCOME a/c? YES - P&L if NO
    ask yourself Is it an EXPENSE A/C? YES - P&L if NO
    ask yourself Is it an ASSET A/C? YES - B/S if NO
    ask yourself Is it an LIABILTY A/C? YES - B/S if NO

    then it could be a Drawings a/c that goes in the Balance Sheet
  • ambitious
    ambitious Banned User Posts: 93 ? ? ?
    The way I remember this just think of ALER.

    DR ¦ CR
    Assets ¦ Liabilities
    Expenses¦ Revenue

    Move assets and liabilities to the balance sheet. Expenses and revenue to the profit and loss account.

    Expenses are anything thats an expense! e.g gas, water, electricity, rent etc. Trickier ones are depreciation, 'discounts allowed', 'Bad Debts' write off expense and 'provision for doubful debts adjustment' if increasing a provision.

    Revenue could be rent received, sundry income, sales. 'Discounts received' is a sundry income and even 'provision for doubful debts adjustment' could be classed as an income if decreasing a provision.
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