Preparing Financial Business Statements

Learning how to prepare financial business statements is important to maintaining the integrity of a business. When managing financial statements, some business owners will make placeholders on the statements, holding the place for data that is to come. They put trial balance amounts on statements for easy reading. After these entries are placed, they are posted to run a total in order to prepare this important document. Most small businesses use a balance sheet and an income statement. These are usually prepared by an accountant. They have the necessary experience to help small businesses to properly organize and present this information.

Preparing Balance Sheets

Also known as a statement of financial position, a balance sheet is a look at your business at a specific time. Much like a snapshot captures a moment in time, this document will list assets, liabilities and the difference between the two known as the net worth. Assets plus liabilities plus owner’s equity (net worth) is the basis for this financial statement. This is prepared after adjusting entries in chronological order to get period end totals. All amounts are rounded to the nearest dollar on this form in a general sense.

Preparing Income Statements

Also known as a profit and loss statement (P&L), this statement lists your income, expenses and the net income or loss. This is equal to the income minus expenses. This doesn’t include cents earned, much like income statements.

Prepare Closing Entries

After financial statements are prepared professional, you will need to begin to get the accounting books ready for the next period. This is done by clearing out income and expense accounts and transferring the net income to the owner’s equity account.

Call to Schedule a Free Consultation With a Professional Accountant Today

If you're interested in learning more about preparing financial business statements, call to schedule a free consultation with an experienced accountant today. At Daleyn Accountancy, our professional certified public accountants can help you to successfully close your financial periods out properly. Call us at 818-696-0866. We serve Encino, Los Angeles, Thousand Oaks, Camarillo, Agoura Hills, Woodland Hills, Calabasas and surrounding communities.