Having more or less got my head around keeping the books for our business, I thought it would be simple to apply some accounting/bookkeeping principles to our family accounts.
I'm finding it not so easy after all!
Background:
I'm trying to set up a simple double entry system on Excel to record the outgoings and incomings of a small trust account set up by my mother in law for my kids, her grandchildren. The money comes in from rent on some properties she owns and is to be spent to their benefit. A lot of work has needed to be done on the properties and the trust barely breaks even most of the time and in some periods has made a loss.
My question:
At the end of the financial year, if this were a business, I would "close the books", transfer all the expenses and income and other temporary accounts to the Profit & Loss account. What is the equivalent of this for a trust?
Looks like your simply dealing with cash flow and a bank account. When the accounts are closed, the bank (as for other balance sheet accounts) would simply have an opening balance per the closing balance of the last year.....so you could simply call it closing balance....or available funds at end of the period.
The expenses/income may be analysed separately but titled 'outflow' and 'inflow' or similar.
I have just realised, Count1314, that I never thanked you for getting back on my query with such a clear answer. That was remiss of me; I am afraid I got distracted. I hope you have automatic notification of responses turned on so that you can see my belated thanks now!
I don't think there is much more to say than what you said. As so often in bookkeeping/ accounting queries it seemed obvious once someone had explained it... but far from obvious *until* someone explained it.
