Help - Extended Trial Balance how to rememeber what goes on Income statment and SOFP

topcat

Finding it very tricky and frustrating to remember what goes on the IS and statement of financial position on the extended trial balance

I know SOFP is assets/liabilities and I/S is expenses and income but the you get things like SLCA and drawings etc which are not so obvious.

Any know of a good way to remember this as it is not sinking in after hours and hours of going over this

zaf1987

I know what you mean, having just done the exam today, some things can get bit confusing.

you have the simple expenses/income, and assets/liabillities in sofp.

Even with things like drawings and slca, the way i did it, as long its not income or expense it must be in sfp.

I guess its a case of keep doing the mock exams.

Zaf

topcat

zaf1987 wrote: »

as long its not income or expense it must be in sfp.

thanks for that might have just made it click with me those few words as obvious as it sounds . how was the exam?

zaf1987

Trust me, keep going over it, once it clicks it sticks, its one of those things you need to keep doing. The exam was ok, i kept reading on here the mocks are pretty much same as real exam, but i found it slightly different with few suprises questions thrown in. however on the whole not too bad, just make sure you got the double entry for accruals and prepayments down, as alot of people strugle with that.


Zaf

billdoor

I think that's good advice if you're struggling, just ask yourself if it is income or expenses - if it's neither, then it must be asset, liability or capital. If you do that then ask yourself which of those it must be.

Actually, with SLCA and PLCA I find the easiest way to remember them is to think if it's a debit or a credit and apply the DEAD CLIC thing. I've no idea what books you're using so in case they haven't mentioned DEAD CLIC:

D - Debit C - Credit

D - Debit balances C - Credit balances
E - Expenses L - Liabilities
A - Assets I - Income
D - Drawings C - Capital

So if you know that SLCA is a debit, it must be one of the things on the DEAD list above; SLCA isn't an expense or drawings, so it must be an Asset.

PLCA is a credit so it must be one of the things on the CLIC list above; PLCA isn't income or capital, so it must be a Liability.

Drawings is a reduction in Capital so must be on the SFP.

I generally applied that to everything and after a while, it becomes second-nature to know where each item should go.

Try it with everything:

Sales are a Credit - CLIC - must be Income so IS.
Purchases are a Debit - DEAD - must be Expense so IS.
Wages are a Debit - DEAD - must be an Expense so IS.
Loans are a Credit - CLIC - must be a Liability so SFP.
Buildings are a Debit - DEAD - must be an Asset so SFP.

And so on. Hope that helps and isn't confusing!