Professional Documents
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Corporate Entities
By Prof. Neha Patel
From Trial Balance to Balance Sheet and Profit & Loss statement
Trial Balance Analysis of Trial Balance Adjustments Inventory Valuation Construction of Financial Statement Balance Sheet P & L Account
Under this concept, it is assumed that organization will continue in operation for foreseeable future
This
is the basic reason for analyzing accounts into assets, liabilities, incomes & expenses
Fixed Assets
Revenue Expenditure
Revenue Receipts
While recording income in profit & loss statement. It must be correlated with all the expenses which lead to generation of such income To figure out the value of inventory at the end of a particular period using methods like: FIFO LIFO
Inventory Valuation
Displays the income & expenditure of the concern The retrospect impact of the same on the profits or losses of the business Displays the amount of Assets & Liabilities accumulated by the business
Balance Sheet
Net Profit
Simultaneously Figure out to which head & which account trial balance account entries Belong to Post entries in Financial Statements after Adjustments Find out the value & amount of Closing Inventory
Statement Post this prepare Balance Sheet If the calculations are correct both sides of the Balance Sheets must match While Calculating for both the statements make sure you make adjustments for depreciation according to the time frame of accounts
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