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ets around the figure). This would mean that even the sale of all your assets and stock and collecting all your debtors would not provide you with enough funds to pay off your suppliers and creditors.
There may be some accounting expressions, especially in the balance sheet, you do not recognise. Prepayments are expenses which have been incurred already on behalf of next years accounts, for example insurance paid in advance. Accruals are estimates of expenses which have been incurred but not yet billed, for example our fees!
Summary
To summarise:-
The profit and loss, or income and expenditure, account shows whether you have been successful during the year and made a profit or unsuccessful and made a loss.
If your income is larger than your expenses then there is a profit. If your expenses are larger than your income then there is a loss.
The balance sheet shows the worth of the business at an instant in time. If your assets are greater than your liabilities then the business is solvent. If the liabilities are greater then the assets then it is insolvent.
Figures for the previous financial year are provided in the accounts as a basis for useful comparison.
If you are VAT registered then the figures in the accounts will normally be VAT exclusive.
Negative numbers are shown in brackets.
Warning
We prepare the accounts from the books and other records you present to us. Except in the case of some limited companies, we do not audit these accounts. An audit is a far more onerous and expensive job where we certify the truth and fairness of the accounts. We may, but cannot guarantee to, pick up errors or omissions in your records. You should take care to ensure that all your taxable income is included in your records (in case of an Inland Revenue investigation) and that we are advised of all possible allowable expenses (to minimise your tax bill). We can take out expenses which shouldn't be there but it's much more difficult to imagine missing ones that should be there.
We hope that you have found this helpful.
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