how to reconcile balance sheet, profit and loss and cashflow statement.

[alexft]

Hi folks,

What is the best way to check that figures in statements add up? Perhaps link to howto? Thanks!

 

[Scalloway]

There is a guide here

http://www.slideshare.net/BSTAI/cash-flow-statements-14577736

 

[alexft]

Hi,

I looked at it and its not clear.

I already produced Balance sheet, P&L and Cashflow reports.

What I have done.

1. Reconciled cashflow from business operations to P&L
2. Reconcile cashflow from investment activities (fixed asses purchase) to balance sheet.
3. Reconciled cashflow from financial operations to liabilities in balance sheet.
4. The cash at the end of the period on the cash flow statement must equal the total ending cash balance on the balance sheet.
5. The Net Income from the Income Statement must also equal the Net Income on the Cash Flow Statement.


Is that it or there is more checks and what are they?

 

[Scalloway]

You should remember there will be non-cash items in the P & L eg depreciation.

 

[alexft]

Yes I am aware of depreciation.

Since main fixed assest are computer equipment which cost under 1000 and cashflow is sound I plan to simply post it in expense in P&L hence realising entire expense immediately.

 

[alexft]

Btw in case of purchasing small fixed assets such as laptop depreciation is not mandatory? Perhaps some link to relevant info

 

[Financial-Modeller]

OP, There is quite a bit more than can be answered in a paragraph. One way would be to get an accountant / Financial Analyst to do it for you!

 

[alexft]

Accounting is often very simple and straightforward. People who say opposite often want to get paid for who knows what

Its mainly 1.data entry and 2.understanding how accounts are interrelated, second can be diagrammed easily.