Friday, February 17, 2012

Balance Sheets Woes

Q.  My accountant says she needs both a Balance Sheet & a Profit & Loss Statement for my business. I keep my books on an Excel Spread Sheet. What is a Balance Sheet?

A.  Think of a Balance Sheet as a snap shot of your business on any given day. Basically it is a compilation of your business assets, liabilities, and net worth of your company. Most accounting software companies provide this information. Since you use a spread sheet, if you have a business entity that requires a balance sheet on your tax return, she may have to compile one from your bank statements, past tax returns, and other information she may request. If this is an ongoing problem, it may be wise to switch to a simple accounting program that can pull this information together for you.

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