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• # 92413
• Tue 23 Jul 2013 11:03 AM

Hi,


I know the trading and balance sheets can be taken from the trial balance, but can a trial balance be taken from the trading and balance sheets?   Aren't some accounts zeroed or put somewhere else? 

I'm guessing I'll learn about this in level 3, but I would be grateful if someone can help me out now.


Sue

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• # 92414
• Tue 23 Jul 2013 11:57 AM

Hi Sue,

Yes, you can go from p&l and balance sheet to a trial balance.  You need to think about whether you want the trial balance to be at the same date as the balance sheet, or whether it is to start a new accounting period. 

If you want to show a trial balance at the period end, the profit and loss accounts eg sales, purchases, expenses, will still have balances, as well as the balance sheet accounts.

If you want the trial balance to be for the start of the new period, it will only include the balance sheet accounts: assets, liabilities and capital/reserves.

Does that help?
Fiona

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• # 92416
• Tue 23 Jul 2013 12:16 PM

Just to clarify  . . . thats nothing on the P & L.  And any P & L that is on the Balance sheet is adjusted on the Capital.


Thanks very much for you reply.

Sue   

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• # 92417
• Tue 23 Jul 2013 12:18 PM

Yes, clean sheet for p&l ready for the next year.
F

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• # 92418
• Tue 23 Jul 2013 12:19 PM

Whoops forgot to mention  . . .I want to start a new period.

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• # 93441
• Tue 10 Sep 2013 11:22 AM

Still very confused.  My partner is a self employed builder so I thought I would have a play with his accounts (don't worry his accounts are still professional done elsewhere) to see if I would be able to set up his accounts and run them as if I was employed to do so.

The trouble is I can't get my head round his balance sheet as at 5 April 2013 from his accountant.  One of the things is the Cash at Bank figure on the balance sheet is £530 when I look on the bank statements for that date it very clearly says £1071.18.


Also Work in Progress figure, where should that go?  


Am I not seeing something?


I am soo glad that I have this dummy company to have a go at and that I have to jump into the world of settling up my own company just yet.


Any info gratefully received.


Sue
        

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• # 93445
• Tue 10 Sep 2013 01:32 PM

Hello Sue,
 
 The bank difference is probably unpresented cheques. The accountant would have included cheques written before 5th April, which went through the bank account after 5th April. I can't remember whether bank reconciliations are part of the ICB manuals?

Work in progress is a type of stock, so treat it as an extra opening stock figure.
 
 Keep firing the questions!
 
 Regards, Fiona

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• # 93447
• Tue 10 Sep 2013 01:59 PM

Yes I can see now I hadn't taken into account the unpresented cheques although it's still out by about £30.


Now would the unpresented cheques show on the trial balance?


So glad you said 'Keep firing the questions' 


Sue
     

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• # 93453
• Tue 10 Sep 2013 04:30 PM

Hi Sue,

Your trial balance will show the cashbook entries made only. A bank statement is merely independent evidence that these entries have all been included. If you are still £30 out, which is higher, cashbook or bank statement ?
- If cashbook is higher it suggests a receipt has been recorded that has not cleared the statement for a couple of days
- If statement is higher, it may be that a bank generated payment has not been entered in the cashbook eg a DD.
The second option is less likely as the accountant should have produced a bank reconciliation statement.

Work in progress will be the value of completed building work that could not be billed at 5/4/13  (eg a half built wall, or even a half built house !). The value will be made up of consumed materials and labour time, but not profit. Your husband will have supplied this information when he handed over his records to the accountant.
This entry can be shown on the trial balance for the purposes of producing the accounts only, and would probably be created as a reversing general ledger journal entry by the accountant.

Hope this helps !

• Kind regards,
  PeteL  

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• # 93467
• Wed 11 Sep 2013 10:26 AM

Hi Pete


So to confirm.  I should take the balance sheet bank total and not the bank statement total when posting opening balances.  And therefore presumably will have to ignore the previous unpresented cheques when they appear on the bank statement so that the bank statement will tally at the end of the month.?.?


Very grateful for this forum and all the lovely patient people that post on here.


Sue     

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• # 93474
• Wed 11 Sep 2013 04:28 PM

Yes, Sue, that's it. 

In a real situation, you would ask the accountant for a copy of the bank reconciliation so there would be less guess work.

Fiona

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• # 93488
• Thu 12 Sep 2013 10:15 AM

Thanks Fiona and Pete for both your support on this matter.


My partner has since decided that he would like his books done on Sage.


At the moment he has an accountant who's old and unhelpful and only does things the manual way.  My partner and myself list all incomings and outgoings on a spreedsheet for the accountant who then gets his wife to do the bookkeeping side.


What would be the best way to go about transferring to computerised?     


If I had all the correct information I would like to think that I could set up the books for my partner but getting them from the accountant might be a problem.  Or would it be best to find a decent accountant who could maybe be able to decipher what information I do have and set up the books onto Sage for my partner and I to carry on from?   


Sue

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• # 93707
• Sat 21 Sep 2013 06:36 AM

Hi Sue
Unless you have already got a licenced copy of Sage i would suggest you have a look at XERO Accounts first. I am moving all my clients over to XERO, it is extremely good and improves the engagement/help i have with clients on an daily/monthly basis. I have clients who i setup on XERO, they enter what they can and I complete the YearEnd etc.

If you need assistance let me know at andrew@ajmartinco.com


Andrew

 

• Andrew Martin MICB

  BusyBooks is part of AJ Martin Co Ltd

  07949 543437

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• # 93708
• Sat 21 Sep 2013 07:17 AM

Hi 

A copy of sage Instant is £125 to £170 depending who you purchase off (example staples , PCWorld, Amazon.  Then it is yours for as long as you want and it is a one off payment.  xero is a good option but make sure you do compare costs.

Edited at 21 Sep 2013 07:28 AM GMT

• Sarah Douglas C.FICB

  HouseTree Business Ltd 

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• # 93709
• Sat 21 Sep 2013 07:25 AM

Hi Spark 

I answered this about bank rec on accounting web so I thought it might help your understanding. 

If you

paid a supplier by cheque it would be the date that you sent the Cheque out that you would enter

if you Lodged money by Lodgement book it would be the date you Lodged the money providing you Lodge daily.

If you paid out  by DPC TUS BAC EBP for example it would be the exact date in the bank 

If you received money by Bacs or chaps  it would be the date it hits the bank .

Items appear as an unreconciled item till it goes through the bank Statement. 

A Bank Rec is used to make sure you have entered your accounts correctly and to make sure the bank have paid out and receipted Lodgements correctly for example Streamline can leave clients short at times and a bank rec should pick this up if your procedures are correct. 

The reason you have a ( book balance which is the TB Balance)   and a (bank Rec balance -bank statement balance ) is that whilst your bank statement may have a £1,000 a director could have sent out cheques for £5000 therefore your bank could be hit at any moment with not enough funds to pay out these cheques.  The book balance gives you the true picture of your bank but you also need to be aware that Lodgements as in Cheques lodged in may well take time to clear even though the date on the bank statement is the date you lodge them and cheques to suppliers may take a while to clear as in the supplier may not bank it straight away ,  but the fact his the company or business have committed  that money leaving the bank account. 

Yes companies do pay out cheques at times for this very reason and to help cash flow

• Sarah Douglas C.FICB

  HouseTree Business Ltd 

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