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<< General Ledger

>> Financials – Trial Balance

This Post is a listing of which General Ledger Accounts are used by which Financial Statement.

Trial Balance: All Accounts

Account	Description	Debits	Credits
1000	Checking Account (Cash)	$44,350
1200	Accounts Receivable	$0
1500	Office Equipment	$1,300
1520	Office Furniture	$1,650
1590	Accumulated Depreciation		$496
2000	Accounts Payable		$1,700
4000	Sales		$50,000
7000	Rent	$3,000
7020	Office Supplies	$150
7040	Subscriptions	$300
7060	Utilities	$125
7100	Fuel	$275
7200	Repairs and Maintenance	$500
7240	Depreciation Expense	$496
7300	Credit Card Interest and Fees	$50
Totals		$52,196	$52,196

Trial Balance: Income Statement Accounts Only

The Income Statement uses the Accounts for Accounting Types:

• Income
• Costs (of goods sold)
• Expenses
• Other Income and Expenses

Account	Description	Debits	Credits
4000	Sales		$50,000
7000	Rent	$3,000
7020	Office Supplies	$150
7040	Subscriptions	$300
7060	Utilities	$125
7100	Fuel	$275
7200	Repairs and Maintenance	$500
7240	Depreciation Expense	$496
7300	Credit Card Interest and Fees	$50
Totals		$4,896	$50,000
	Difference = Net Income	$45,104

Trial Balance: Balance Sheet Accounts Only

The Balance Sheet uses Accounts for Accounting Types:

• Assets
• Liabilities
• Owners (Stockholders) Equity

These example accounts do not have beginning balances and no equity contributions.  If there had been equity contributions the equity accounts would also be included in this section of the trial balance.

Account	Description	Debits	Credits
1000	Checking Account	$44,350
1200	Accounts Receivable	$0
1500	Office Equipment	$1,300
1520	Office Furniture	$1,650
1590	Accumulated Depreciation		$496
2000	Accounts Payable		$1,700
Totals		$47,300	$2,196
	Difference = Net Income		$45,104

Statement of Cash Flows: This Statement documents both the change in Cash Position and the change in Financial Position.  The Statement of Cash Flows is essentially a Yearly Balance Sheet with an emphasis on Cash.

Notice that debits and credits are presented in the way that they contribute to cash.  This report might take some adjusting to as the +/- of all debit and credit accounts except Cash are reversed.

Statement of Cash Flows
Cash Flows From Operating Activities
Net Income	$45,104
(add back expenses that did not involve cash or cash substitutes)
Depreciation (see Bal Sheet Account 1590)	$496
Increase in Payables (see Bal Sheet Account 2000)	$1,700
	————
Net Cash Provided by Operating Activities	$47,300
	————
Cash Flows From Investing Activities
Increase in Fixed Assets (see Bal Sheet Accounts 1500 & 1520)	-$2,950
	————
Net Cash Used by Investing Activities	-$2,950
	————
Cash Flows From Financing Activities
(no increase in long term liabilities or equity)	$0
	————
Net Cash Provided by Financing Activities	$0
	————
Increase in Cash and Cash Equivalents (Net Cash Flow)	$44,350
Cash and Cash Equivalents at Beginning of Year	$0
	————
Cash and Cash Equivalents at End of Year (see bal sheet acct 1000)	$44,350

© 2008 – 2010 Erin Lawlor

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**disclaimer:  All information posted on this blog is from my own experience and training.  The guidelines I present are general and in my experience, standard practice.  I do not write with authority from any Accounting Standards Boards.