Transferring accounts to income statements, balancing accounts and preparation of statements of financial position
At the end of an accounting period, a business closes its revenue and expense accounts by moving their totals into an income statement. It then lists all remaining balances to build a statement of financial position.
Formula
Assets = Capital + Liabilities
Real World
When Marks & Spencer publishes its annual statement of financial position, non-current assets like store property sit above current assets like inventory, following the same balancing structure students practise in class.
Exam Focus
Show your balance c/d and balance b/d entries clearly; examiners award process marks even if your final figure is wrong.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
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