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close this bookAccounting for the Microbusiness - A Teaching Manual (Peace Corps, 1975, 105 p.)
close this folderAids
View the documentAccounting interview
View the documentThe object of accounting
View the documentBalance statement
View the documentAssets = Capital
View the documentAssets - Liabilities = Capital
View the documentProfit and loss statement
View the documentCost of goods sold
View the documentTrial balance
View the documentInitiation sheet
View the documentDefinition of debit and credit
View the documentThe evolution of debit and credit
View the documentTransactions
View the documentCash voucher
View the documentSales voucher
View the documentReceipt
View the documentDiagram of the system
View the documentCash book
View the documentGuide to accounting entries
View the documentCash transactions
View the documentCredit sales book
View the documentCredit purchases book
View the documentCredit sales
View the documentCredit purchases
View the documentPayments
View the documentLoans to employees section
View the documentLoans to employees list
View the documentBook of accounts: Title of account pages
View the documentMonthly inventory listing
View the documentGuide to financial statement elaboration
View the documentUniterrupted working capital flow
View the documentInterrupted working capital flow
View the documentInventory control - page examples
View the documentControl of postdated checks
View the documentAuxiliary cash on hand sheet
View the documentCredit payments with merchandise
View the documentAlternative Acc/Rec section

Guide to financial statement elaboration

On the last day of the month:

1. Take an inventory of raw materials, goods in process and finished goods.

2. Close the Books

a. Square the Cash Book
b. Close the Amount Sections of Sales and Purchases
c. For the next month, leave a few spaces and begin Cash Book and Amount entries once again.

To construct the Statement:

1. Pass all the ending debit and credit balances from the Cash Book to the Book of Accounts.

2. Pass the balances from the Amount Sections of Sales and Purchases to the Book of Accounts.

3. Calculate the balances of the accounts in the Book of Accounts like this:

Cash on Hand

Date


Deposit

Withdrawal

Balance

6

30

Initial Balance



250

7

31

Squared

1, 900

1, 860

290

Initial Balance

250

+ Deposit

+ 1, 900


2, 150

- Withdrawal

- 1, 860

Final Balance

290

4. Compare control account balances (Cash on Hand, Banks, Accounts Receivable and Payable, Loans to Employees) to the balances in the Book of Accounts.

a. They should be equal
b. If not equal, proof read and correct the entries.

5. Pass all balances from the Book of Accounts to the Trial Balance.

a. Use last month's Inventory
b. Columns I and II must be equal.
c. If they are not equal:

1) Review the balance entries checking the numbers carefully.
2) Review the mathematics.
3) Make sure you have included every account.

6. Pass the Balances from the Trial Balance to the Profit and Loss Statement and the General Balance Statement.