« All companies record their day-to-day accounting transactions gradually throughout the financial year, on the day they take place. These day-to-day transactions are then summarised in the trial balance. At the year end, the company must present summary documents relating to the year that has just ended (namely balance sheet, income statement and notes to the accounts). However, these summary documents are not created solely from the trial balance. At the year end, the accountant* needs to ensure that the account balances that will be used to prepare the balance sheet truthfully represent the underlying transactions and accurately reflect the company’s net worth at the end of the period.»
*The word accountant is used here in the broad sense: it refers to any person responsible for preparing the summary documents (independent chartered accountant, the company’s chief accountant, etc.).
Franck NICOLAS – The author
The summary documents and the PCG
Balance sheet accounts
Management operating accounts