5: Preparing basic financial statements

Question 1

When balancing all the ledger accounts, what balances with Profit & Loss ledger?

Answer 1

Income and expenses, then capital is the balancer

Question 2

What is in the statement of financial position?

Answer 2

Assets, liabilities, capital

Question 3

What is a trial balance?

Answer 3

List of nominal ledgers shown in debit and credit columns to check accuracy of double entry bookingkeeping system.