How to fill in the closing balance and the beginning balance of the balance sheet.
A balance sheet is an important part of a business's financial statements and is used to reflect the financial position of a business at a specific date. In the preparation of the balance sheet, the closing balance and the beginning of the balance are the key steps. This article will explain in detail how to fill in these two types of balances.
1. Fill in the closing balance.
The closing balance refers to the assets and liabilities of a business at the balance sheet date. When preparing the balance sheet, it is necessary to summarize and calculate according to the general ledger, sub-ledger and other materials to obtain the closing balance of each item. Here's how to fill in the closing balance:
Asset items: Fill in the items directly based on the closing balance of the asset account. For example, the closing balances of items such as cash on hand, bank deposits, accounts receivable, fixed assets, etc., can be found directly from the general ledger or other relevant materials and filled in the balance sheet.
Liabilities: Directly filled in according to the closing balance of the liabilities account. For example, the closing balances of items such as short-term borrowings, accounts payable, and employee compensation payable can also be found directly from the general ledger or other relevant information and filled in the balance sheet.
Owner's equity items: Directly fill in the closing balance of the owner's equity account. For example, the closing balance of paid-in capital, capital reserve, surplus reserve and other items can also be found directly from the general ledger or other relevant information and filled in the balance sheet.
2. Fill in the balance at the beginning of the year.
The balance at the beginning of the year refers to the state of assets and liabilities at the beginning of the year. When preparing the balance sheet, it is necessary to take the year-end number of the previous year's balance sheet as the balance at the beginning of the balance sheet of the current year. Here's how to fill in the balance at the beginning of the year:
Reconcile the beginning of the year: Before preparing the balance sheet for the current year, you need to reconcile the end of the previous year's balance sheet. Ensuring that the year-end figures of the previous year's balance sheet are accurate is the basis for filling in the balance at the beginning of the current year's balance sheet.
Direct Entry: The year-end number of the previous year's balance sheet is directly entered into the corresponding item in the current year's balance sheet. It is important to note that the amounts of certain items may need to be adjusted or converted due to possible changes in accounting policies or accounting methods from year to year.
Adjustment differences: Adjustments are required if there are differences between certain items in the current year's balance sheet and the year-end number of the previous year's balance sheet. These differences may include changes in accounting policies, adjustments to accounting methods, reclassifications, etc. When adjusting differences, it is necessary to operate in accordance with relevant accounting standards and policies to ensure that the adjustments are reasonable and compliant.
Note: When filling in the balance at the beginning of the year, you need to pay attention to prevent errors and omissions. At the same time, it is also necessary to pay attention to the requirements and regulations for the disclosure of financial statements to ensure that the content of the disclosure is true, accurate and complete.
To sum up, there are certain methods and steps to follow in filling out the closing balance and the beginning balance of the balance sheet. In the process of filling in, you need to pay attention to the requirements of accounting standards and policies to ensure the accuracy and compliance of the statements. At the same time, it is also necessary to pay attention to the work of checking data and adjusting discrepancies to ensure the quality and reliability of the report.