Profit and loss, balance sheet, trial balance and cash flow
Read your profit and loss, balance sheet, trial balance and cash flow statement for any date or period, straight from the posted entries in your books.
The four financial statements come from the same place: the journal entries posted in your books, in AED. Nothing is typed in or kept separately, so the profit in the profit and loss, the profit in the balance sheet and the starting point of the cash flow statement are always the same figure. Drafts are never included.
Open Reports in the main menu and click the tab of the statement. To print or export a statement, see Reports.
Profit and loss#
The Profit & Loss Report shows your income and expenses for a period. It opens on your financial year so far: change From and To for another period, for example a month or a quarter.
The report has four parts, each with its total, and every line shows the account code and name:
| Part | What is in it |
|---|---|
| Revenue | Your income accounts, except other income. |
| Cost of sales | Expense accounts for cost of goods sold and direct expenses. Under it: Gross profit, revenue less cost of sales. |
| Other income | Income accounts for other income, such as interest received or exchange gains. |
| Operating expenses | All other expense accounts. |
At the bottom, Net Profit / (Loss) is revenue and other income less cost of sales and operating expenses. An amount is shown with its sign: a refund booked against a revenue account lowers revenue, a credit on an expense account lowers expenses.
1 The period. 2 Tags and 3 Split by tag appear when your company uses reporting tags: Tags limits the report to the lines with the tags you tick (Not tagged takes the lines without one), and Split by tag shows one column for each value of a tag, with a Total column. 4 Gross profit and 5 Net Profit / (Loss).
Balance sheet#
The Balance Sheet Report shows what the company owns and owes at one date, the As of date. It has three parts, Assets on the left and Liabilities and Equity on the right, each with its total. Total Liabilities & Equity closes the right-hand side.
- 1 The As of date.
- Contra accounts, such as accumulated depreciation, are shown as negative amounts under the assets they reduce.
- 2 The profit that has not been closed to retained earnings appears in equity as calculated lines in italics: the profit of earlier financial years as retained earnings brought forward, and the profit of the current financial year up to the date as profit for the period. These lines are worked out from the books; they are not postings.
- 3 Total Liabilities & Equity equals Total Assets, and 4 Balanced confirms it. If the two ever differ, the badge turns red (Unbalanced) and shows the difference.
Trial balance#
The Trial Balance Report lists every account with a balance at the As of date: Account Code, Account Name, Debit and Credit, and the Totals at the bottom.
Balance sheet accounts show their balance since the start of your books. Income and expense accounts show the current financial year only, from its first day to the date. The profit of earlier years that has not been closed to retained earnings is one calculated line, so that debits and credits are equal.
1 The calculated retained earnings line. 2 Totals. 3 Balanced.
When your company uses reporting tags, Tags shows the trial balance of the lines with those tags only, for example one branch. Such a trial balance need not balance, and the report says so.
Cash flow#
The Cash Flow Report is a cash flow statement by the indirect method, as IAS 7 describes it, for the period between From and To.
- Cash Flow from Operating Activities starts with 1 Net profit for the period, the same figure as the profit and loss. It then adds back items that moved no cash, such as depreciation and provisions, and adjusts for the change in receivables, payables, inventory, VAT and the other working capital accounts. 2 Net Cash from Operating Activities is the total.
- Cash Flow from Investing Activities has the payments for fixed assets and the proceeds of assets sold.
- Cash Flow from Financing Activities has loans received and repaid and the movements on equity accounts.
- Effect of exchange rate changes on cash and cash equivalents appears when your foreign currency bank balances moved with the exchange rate.
At the bottom, Net Increase / (Decrease) in Cash, Cash at Beginning of Period and 3 Cash at End of Period. Verasol checks the cash at the end against the cash and bank accounts in the ledger: 4 Cash at end agrees with the cash and bank accounts in the ledger, or the difference in red. Under it, the accounts counted as cash and cash equivalents: your bank accounts (overdrafts included), cash on hand and petty cash.
Transactions that moved no cash but are investing or financing in nature, such as an asset bought on credit, are listed under Non-cash transactions (not in the statement). When the asset is paid for later, the payment shows under investing activities.