| View previous topic :: View next topic |
| Author |
Message |
Jennifer
Joined: 16 Aug 2005
Posts: 47
Location: Plano Texas
|
| Posted: Tue Jun 05, 2007 8:59 pm Post subject: Help desperately needed! |
|
|
| I have reconciled all of 2006 bank statements and my client is assuming that if I do a Balance Sheet for Dec 31 2006, that balance should be the same as the ending balance on the bank statement and frankly I would assume that as well. But it's not, it's over $76000 higher. I tried looking at as cash and accrual basis and it didn't matter. Any help would be appreciated!! |
|
| Back to top |
|
Richard Noot
Joined: 20 Aug 2005
Posts: 912
Location: Minnesota
|
| Posted: Tue Jun 05, 2007 9:46 pm Post subject: Re: Help desperately needed! |
|
|
Jennifer wrote: I have reconciled all of 2006 bank statements and my client is assuming that if I do a Balance Sheet for Dec 31 2006, that balance should be the same as the ending balance on the bank statement and frankly I would assume that as well. But it's not, it's over $76000 higher. I tried looking at as cash and accrual basis and it didn't matter. Any help would be appreciated!!
The balance sheet reflects what the businesses records reflect. The bank statement reflects what the banks record show. Unless all deposits and checks have cleared and the bank charges are zero they will never be the same figure. |
|
| Back to top |
|
Jennifer
Joined: 16 Aug 2005
Posts: 47
Location: Plano Texas
|
| Posted: Tue Jun 05, 2007 10:04 pm Post subject: |
|
|
Hi Richard,
OK, that makes sense to me, I think. I guess she and I (feeling very newbie at the moment) assumed since it was the past year and everything had cleared that the amounts would be the same. Next question is how do I convince her that I haven't done anything wrong, even her CPA doesn't seem to grasp certain accounting concepts that even I would consider simple. Thanks again, I'm always up late at night when I need answers and I appreciate you provding one! |
|
| Back to top |
|
Jennifer
Joined: 16 Aug 2005
Posts: 47
Location: Plano Texas
|
| Posted: Wed Jun 06, 2007 9:01 pm Post subject: |
|
|
| Please, really needing help here. There has to be a way that I can show end of the fiscal year amounts for the Balance Sheet and Cash Flow statements. Is the only way is to start a whole new company file each year?? My client doesn't understand why I can't give her a report showing the exact figures for end of the year 2006. |
|
| Back to top |
|
DBeaver
Joined: 20 Dec 2006
Posts: 35
Location: Halifax Nova Scotia Canada
|
| Posted: Sat Jun 09, 2007 10:05 am Post subject: |
|
|
Hi Jennifer,
The Balance Sheet and Bank balance are 2 different things and normally can't be comparedside by side.
If you have posted all of the information according to when it happened (won't matter it is accrual or cash accounting), the information on the balance sheet and income statement will be THE final word.
Consider this: on the last day of the period, you write a check and mail it off to your supplier. The supplier gets it 4 days later and doesn't deposit it for another 5 days. Your bank produces your statement 1 day before this check clears so it will not include this item. Think about it....Your Balance Sheet has already accounted for this amount but your bank hasn't at this point. the Balance Sheet and Bank Statement balance will NOT agree! Think about outstanding deposits the same way!
I know this is a hard one for clients to grasp, but they can be assured that YOU have accounted for all of these items and that the Balance Sheet is really the FINAL word on the balances. As you know, the Balance Sheet is exactly like a "snapshot" of the company at an exact point in time.
Hope this helps
Dave |
|
| Back to top |
|
| |
