1. Create a spreadsheet page with a separate column for each major class of receipts and payments of your business. 2. Place column totals from all your lists in the correct places following the example below. 3. The amounts in brackets are negative, representing money earned or reductions in assets (credits). All other amounts are positive, representing money spent or reduction in liabilities (debits). (This convention avoids overuse of the leading minus when entering data.) Using double entry by showing the equal but opposite effect of each type of transaction, allows control account balances to be agreed to supporting documentation as notated in the annual summary example below.
Note on VAT Gross includes VAT. Net is before
VAT is added on. If your business is not registered for VAT or there is no
VAT due on the sale or expense, then VAT is ignored and net will be the same
amount as gross. All amounts in control lines are gross.
1. Each column should total up to nil otherwise you have missed an entry or confused the positive and negative amounts. 2. The trial balance will always be the last column in the annual summary. 3. Agree customer control to the list of money owed to you. 4. Agree supplier control to the list of money owed by you. 5. Agree a negative VAT balance in the trial balance column to your payment due to the Vat office and a positive VAT balance to the receipt you expect from the VAT office for the period, whichever case is relevant. 6. Agree the bank line in the trial balance column to the cashbook total of the bank summary.
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