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How to Create a Balance Sheet and Profit and Loss Statement

Contents

Introduction

In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership, a corporation or other business organization. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year. The four basic financial statements are:

  1. Statement of Financial Position: also referred to as a balance sheet, reports on a company's assets, liabilities, and ownership equity at a given point in time.
  2. Statement of Comprehensive Income: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time. A Profit & Loss statement provides information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state.
  3. Statement of Changes in Equity: explains the changes of the company's equity throughout the reporting period
  4. Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities.

Income statement (also referred to as profit and loss statement (P&L), revenue statement, statement of financial performance, earnings statement, operating statement or statement of operations) is a company's financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as Net Profit or the "bottom line"). It displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs (e.g., depreciation and amortization of various assets) and taxes. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.

The important thing to remember about an income statement is that it represents a period of time. This contrasts with the balance sheet, which represents a single moment in time.

Activities

Step 1. Chart of accounts setup

The first important thing to understand is how the chart of accounts is configured in Openbravo. This is explained in the Account Tree window and in the wiki page How to Set Up the Chart of Accounts.

Step 2. Balance sheet and Income statement setup

After configure the account tree properly, go to Financial Management > Accounting > Analysis Tools > Balance sheet and P&L structure setup. In the wiki page for that window are the setup instructions:

Step 3. Launch the Balance sheet and Income statement

Once the account tree is configured and the Balance sheet and Income statement structure have been configured, go to Financial Management > Accounting > Analysis Tools > Balance sheet and P&L structure window. In that window it is possible to launch the Balance sheet and Income statement (or P&L structure) as explained in the wiki page for that window:


Examples

Example 1 - Balance Sheet

One example of a Balance Sheet structure can be:

Balance Sheet and Income Statement 02.png Balance Sheet and Income Statement 10.png

Above nodes must be part of the corresponding Account Tree and must be properly configured.

Once the Balance Sheet has been setup, go to lunch the Balance Sheet in the Balance sheet and P&L structure window:

Balance Sheet and Income Statement 03.png

As shown in the image above data to fill in is:

Under the "Primary Filters" section it is possible to specified:

Finally, press the PDF Format button and the next report it is displayed:

Balance Sheet and Income Statement 04.png

Example 2 - Income Statement

And an example for a Profit and Loss report would be:

Balance Sheet and Income Statement 05.png

Balance Sheet and Income Statement 06.png

Above node must be part of the corresponding Account Element and must be properly configured.

Balance Sheet and Income Statement 07.png

As shown in the image above data to fill in is:

Under the "Primary Filters" section it is possible to specified:

Finally, press the PDF Format button and the next report it is displayed:

Balance Sheet and Income Statement 08.png

Retrieved from "http://wiki.openbravo.com/wiki/How_to_Create_a_Balance_Sheet_and_Profit_and_Loss_Statement"

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