Quick accounting question.

freeze4real

Hello guys,

Cna an income statement and balance sheet balance at two different figures, and still be right ?

I am doing some revision with some friends and we did a question and we arrived at different figures but they balanced, is that strange ?

barneystinson

freeze4real wrote: »

Hello guys,

Cna an income statement and balance sheet balance at two different figures, and still be right ?

I am doing some revision with some friends and we did a question and we arrived at different figures but they balanced, is that strange ?

Sorry, are you saying that you and your friend each balanced your own income statements & balance sheets, but that your figures differed from each other?

If so, then no, of course ye can't both be right, that's kind of the whole point of accounting, it prescribes rules which mean that the end result should be consistent!

Say the only difference was around the purchase of a car in the question. He includes it as a motor expense (wrong), and you include it as a fixed asset addition, and charge depreciation.

Assuming you do everything else identically, he will have a lower profit, and a lower balance sheet total, and you will have a greater profit increasing the bottom half of your balance sheet (and the fixed asset will increase the top half correspondingly).

They both balance, but only one is right...

freeze4real

thanks for clearing it up.

Smartguy

Also likely is that when posting a journal you entered say 890 and the other person posted 980. If the journal is correct other than this then the balance sheet will still balance.