basic balance sheet question


L

lickle_elf

Hello

I offered to help a friend produce very simple accounts for the
Educational centre she runs as a charity. Producing the balance sheet
the first year was simple as the only entries were CURRENT ASSETS,
Cash at hand and in bank = REPRESENTED BY Net incoming resources.

This year the balance sheet still just has the two enries, however as
this is her second year trading the Cash at hand and in bank figure
represents TWO years Net incoming resources so it will not balance
with the Net Incoming resources figure for this year (obviously).

Can someone advise of of the best way of showing how the represented
by figures match the Cash and bank figures please.

Many Thanks
 
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P

PeterSaxton

Hello

I offered to help a friend produce very simple accounts for the
Educational centre she runs as a charity. Producing the balance sheet
the first year was simple as the only entries were CURRENT ASSETS,
Cash at hand and in bank = REPRESENTED BY Net incoming resources.

This year the balance sheet still just has the two enries, however as
this is her second year trading the Cash at hand and in bank figure
represents TWO years Net incoming resources so it will not balance
with the Net Incoming resources figure for this year (obviously).

Can someone advise of of the best way of showing how the represented
by figures match the Cash and bank figures please.

Many Thanks
It's the net income from the previous year and you add the income from
this year to agree to the balance for current assets.
 
L

lickle_elf

On 16 Apr, 11:55, (e-mail address removed) wrote:
It's the net income from the previous year and you add the income from
this year to agree to the balance for current assets.-
Thank you Peter

Yes Thats what I thought I should do but then I thought about next
years and the year after that and I imagined that there must be a
better looking solution than listing all the previous years income
separtely.

How about like a Capital Account. Where I would have an opeing balance
and the current years income added together for a closing balance to
carry forward as a single entry. Would that be a suitable solution for
forthcoming years? Would calling it Capital Account be appropriate?

Thanks Again
 
R

Ronald Raygun

I offered to help a friend produce very simple accounts for the
Educational centre she runs as a charity. Producing the balance sheet
the first year was simple as the only entries were CURRENT ASSETS,
Cash at hand and in bank = REPRESENTED BY Net incoming resources.
The fixed+current assets are *not* represented by net incoming
resources, they are represented by the General Fund (and sometimes
the GF is subdivided into restricted and unrestricted funds).

Within this general fund the closing balance is equal to the opening
balance plus (or minus) net incoming (or outgoing) resources.

In the first year, the General Fund opening balance is of course zero,
so the closing balance will equal the net incoming resources, and this
can fool you into thinking that the assets should be "represented by"
the NIR.
This year the balance sheet still just has the two enries, however as
this is her second year trading the Cash at hand and in bank figure
represents TWO years Net incoming resources so it will not balance
with the Net Incoming resources figure for this year (obviously).
This year, as last year, the assets should be represented by the
closing balance of the General Fund. This year's opening balance
is of course the same as last year's closing balance, and you add
this year's NIR to that to get this year's closing balance.
 
L

lickle_elf

The fixed+current assets are *not* represented by net incoming
resources, they are represented by the General Fund (and sometimes
the GF is subdivided into restricted and unrestricted funds).

Thankyou Ronald

Yes General Fund is much more appropriate for a non profit making
organisation.


many thanks
 
P

PeterSaxton

Thank you Peter

Yes Thats what I thought I should do but then I thought about next
years and the year after that and I imagined that there must be a
better looking solution than listing all the previous years income
separtely.

How about like a Capital Account. Where I would have an opeing balance
and the current years income added together for a closing balance to
carry forward as a single entry. Would that be a suitable solution for
forthcoming years? Would calling it Capital Account be appropriate?

Thanks Again
It is like a Capital Accounts but usually they are called Funds of one
sort or another.
 
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Relating to Capital a/c, those are under equities and liabilities... correct me if I am wrong!
 

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