Balance Sheet
Balance sheet is separated into 2 sides. On one side are assets and the other are liabilities and owner's equity. Balance Sheet got it's name because both sides of the accounts should always be equal. The main reason to the "balanced" accounts is the accounting principle of double entry. This means it records all transactions in at least two different accounts, and therefore also allow users to check if the entries are consistent. Each side, on its own, should add up to the total value in the business. The formula to a balance sheet is:
Assets = Liabilities + Owner's Equity
Both sides must always be balance because the total value of the business's Assets are all funded through Liabilities and Equity. When you enter your transaction in TreezSoft, our accounting system will automatically generate the double entries for you. TreezSoft allows you to generate a balance sheet report in a few clicks.
If your balance sheet is not balanced, it means there's an error in your account entries. Error scanning and identification can easily be done in TreezSoft balance sheet system. In this blog, we will guide you on how you can do it.
Identify the problem
To find out what caused the error, you will first need to narrow down the report period by searching month-by-month.
Go to General Ledger > Trial Balance / Balance Sheet
Below is the Trial Balance screen:
- Go through month-by-month on the date searching bar.
- Click "Retrieve" to get the transaction of that month.
- Look at the total amount at the bottom right screen to check.
Once identified the month where unbalanced transaction started, go to Journal Report and generate a report for that month.
Navigate through General Ledger > Journal Report.
Journal Report will generate all the transactions for the month and you will be able to pinpoint which transaction caused the unbalanced figure.
- Select the date where unbalanced transaction started.
- Click "Retrieve" to generate all the transaction for that month.
- Identify the unbalanced transaction.
Once you've found out the particular transaciton, you can make respective adjustment to your business transactions recordings.
**Note: Repeat these steps if you have multiple unbalanced records until balance sheet is balanced.
You can also visit the links below to read more on related topics in TreezSoft:
TreezSoft is a cloud accounting software for Small and Medium-sized Enterprises (SMEs). It allows you to access your financial information anytime, anywhere. It also allows you to have unlimited users for FREE for your account in TreezSoft. Our aim is to help reduce our clients' time spent on accounting mainly by using our automated processes and integration to help increase their company efficiency at a minimum cost. SMEs can use TreezSoft to keep track their expenses, accounts, daily operation e.g. Point of Sales (namely QPOS) system and etc.
Visit TreezSoft at http://www.treezsoft.com/ to sign up for a 30 days trial account with us!
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