The balance sheet we use on a daily basis can be applicable to any enterprise. Each enterprise must fill out the balance sheet every month. Through the balance sheet, we can check the operating conditions of the enterprise. Does the balance sheet have to be reclassified? Through multiple understandings, there is no mandatory reclassification of the balance sheet yet.
Is the balance sheet necessary to be reclassified?
There is no mandatory requirement, monthly or quarterly reclassification, and annual statements are recommended to be reclassified.
Balance sheet represents the financial status of the enterprise (i.e. the status of assets, liabilities and owner's equity) on a certain date (usually the end of each accounting period) Main accounting statements. The balance sheet uses the principle of accounting balance to divide the trading accounts such as assets, liabilities, shareholders' equity, etc. that conform to the accounting principles into two major blocks: "assets" and "liability and shareholders' equity". After entries, transfers, ledgers, trial calculations, adjustments and other accounting procedures, it is condensed into a report based on the static enterprise situation on a specific date. In addition to internal enterprise error prevention, business direction, and prevention of disadvantages, its reporting function can also allow all readers to understand the business conditions of the enterprise in the shortest time.
What is the cross-checking relationship between the balance sheet and the income statement?
There is a cross-checking relationship between the data between the balance sheet and the income statement. Their relationship is mainly reflected in: "undistributed profits" in this period of the balance sheet - "Undistributed profit" in the previous period = "Net profit" in the income statement of this period.
The relationship between the two balance sheet and income statement statement is as follows:
1, "Undistributed profit" account end number - "Undistributed profit" account start number = "Net profit" account cumulative number
2, "Net profit" account + "Undistributed profit at the beginning of the year" - Profit distribution in this period - Providing provident fund, public welfare fund = Balance sheet "Undistributed Profit at the End of Period" ending number
3. As for the cross-checking relationship between the cash flow statement and the other two statements is relatively complicated. From another perspective, there is no certain cross-checking relationship in the statement alone. The cash flow statement must be supported by detailed accounts. According to the new enterprise accounting standards, small enterprises do not require the issuance of cash flow statements.
4. The objects reflected by the two tables are the same. Both tables reflect the bonus movement. The balance sheet reflects the static performance of funds. It reflects a certain point in time. The status of the award funds, the income statement reflects the dynamic performance of the capital movement, reflecting its operating conditions during the period.
5. Both tables are general reports. They are both monthly reports and comprehensive reflections of economic business.
6. The functions of the two tables complement each other and complement each other: the balance sheet reflects the results of the company's profit and loss, that is, the structure of assets, liabilities, and owner's equity; the profit and loss statement explains the process of the formation of profit and loss and the number of profit and loss.
7. Assets The "undistributed profit" in the balance sheet is equal to the "undistributed profit" (total profit - profit distribution) in the "profit distribution statement" in the "income statement" at the income statement. (Note, this undistributed profit is the accumulated profit of the enterprise, not the profit for the current period)
8. The relationship between the two tables is a reflection of the inherent connection between the two equations "asset = liabilities + owner's equity" and "income - expenses = profit (or loss)". That is, after the profit and loss of this period occurs, the equal relationship in the balance sheet is actually the merger of the above accounting equations: assets = liabilities + owner's equity +(Income-Fee). This equation is a comprehensive accounting equation, where "assets" contain profits, because the manifestation of profits is assets. The information compiled above
is our answer to the question "Does the balance sheet must be reclassified?" There are no rigid regulations on the balance sheet, and it must be reclassified. However, I suggest that you can reclassify it in the annual statement. In addition, I also introduced the cross-checking relationship between the balance sheet and the income statement, for reference only!
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