How to prepare balance sheet and profit and loss account?
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First record all your transactions and prepare,
Journal
Ledger
Trial Balance.
Now post the balances of each ledger into one these:
Trading a/c
Profit or loss a/c
Balance sheet
If the transactions are directly related to business put it in Trading a/c.
If it is indirect put it in profit and loss a/c
If it is an asset or liability put it in Balance sheet
Journal
Ledger
Trial Balance.
Now post the balances of each ledger into one these:
Trading a/c
Profit or loss a/c
Balance sheet
If the transactions are directly related to business put it in Trading a/c.
If it is indirect put it in profit and loss a/c
If it is an asset or liability put it in Balance sheet
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