I've just started as a junior bookkeeper at a small plumbing firm in Sydney. There we use MYOB as the accounting software to record daily journal entries. The boss only uses the bank account for all transactions, the beginning balance of the bank account last year was around 10000. As i generate the Profit and lost statement, it says the business has lost around 7000. So in my opinion, the ending balance should be equal to the opening balance minus the loss right? But when i calculate this simple equation, the ending balance calculated would be around 3000, whereas in fact ending balance in the bank account is only around 1000. Why is that anybody can help?
As long as the bank reconciliation works, so the bank balance per MYOB can be reconciled to the balance per the bank statement, you don't really need to worry. The difference between your calculation and the actual movement in the bank may be due to payments and/or receipts that relate to balance sheet items. For example, has the business purchased any fixed assets in the year?
__________________
Pearce & Co - Chartered Accountant and Chartered Tax Adviser
