Extended trial balance

seancobley_

Hi,

Just wondering if anyone knew a way to remember what goes in the Statement of Finacial position or in the Profit and loss account in the extended trial balance?
Thanks

AngelDust

Hi there, personally I divide it (generally) between revenue/capital expenses and income.

P+L Statement = Revenue expenditure/income. So here you've got your Admin Expense, Wages, day-to-day running expenses and income e.g. Sales account.

Balance Sheet = Capital expense/income e.g. Capital account, Drawings, SLC account etc. Generally long-term accounts.

Hope that helps!

CeeJaySix

Some people like to think of what is an ongoing balance, as opposed to what is measuring the performance of the business over a period.

For example, the bank account, trade receivables and trade payables are all ongoing balances that will be constantly updated and correct at any given time. These are all statement of financial position items - a snapshot of the state of the business at that moment.

Revenue and expenses on the other hand are used to measure how the business performs over a given period - usually a year for statutory accounts. These reset to zero for the next period. Any items like this are P&L.

Kkadijat

Think about it ths way,
SPL records the profit/ INCOME ie what the bussiness gained through SALES, Discount received, purchases returns, interest received,and CLOSING INV' ( Cr)
And loss ie EXPENSES- genral exp', sales exp' telephone, wages, purchases, discount allowed, ,sales returns, building repairs, rent & rates, insurance, heating & lighting, interest paid, Admin expenses, deprciation charges,and of course opening inventory (Dr)

SFP records the account balaces that allow the business to know what they OWE/LIABILITY ie PLC ,bank - if overdrawn, capital, VAT, Equipment accum depr', loan, Allowance for doubtful debt (Cr)
And OWN/ASSET ie SLC, Bank, equip @ cost, drawings, prepayments, ;land & building @ cost, shop fittings @cost, and closing inventory (Dr).

I would sugest you draw up a ETB and fill all the above in and put a dash in the appropriate account they belong. like:

Account name Legder balance Adjustments SPL SFP
Dr Cr Dr Cr Dr Cr Dr Cr
Capital - PLC -
SLC -Bank -
Bank -
(Ifoverdrawn Hope this helps and good luck.

Kkadijat

Sorry the table I made didn't come out well but i hope you know what to do.