Preparing Financial Statements

After you have prepared your adjusting entries in the general journal, posted the general journal totals to the general ledger, and footed the general ledger accounts, you are ready to prepare financial statements. If all adjusting entries have been made, and a trial balance done, preparing financial statements is really just a matter of putting the trial balance amounts onto properly formatted statements.

The financial statements prepared for most small businesses are:

• a balance sheet
• an income statement

Usually these are prepared by an accountant. But with the help of computer software, you may be able to prepare your own financial statements. If you need to prepare financial statements for third parties, such as a banker, sometimes the third party may request that the financial statements be prepared by a professional accountant or certified public accountant.