balance sheet, P&L, Trial balance - is there an easy way?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi
Does anyone know an easy way of rememebering what items go on the balance sheet, P&L and Trial balance.
it gets confusing..

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:balance sheet, P&L, Trial balance - is there an easy way?

    Hi,
    Profit and Loss shows income and expenses.
    Balance Sheet shows assets and liabilities.

    Income - expenses = net profit ( or loss )

    Assets - liabilities = capital

    Assets = what the business owns
    1. Fixed assets ( premises, vehicles )
    2. Current assets ( debtors, bank, cash, prepayments)

    Liabilities = what the business owes
    1. Current liabilities ( creditors, VAT, accruals )
    2. Long term liabilities ( bank loans )

    Hope will help you :D












  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:balance sheet, P&L, Trial balance - is there an easy way?

    Hi

    Don't know if this helps but the balance sheet items are those that are carried over to the following year ie bank accounts etc, P&L items are accounts that only affect this year, i.e. rent, purchases sales.

    Good luck

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