Question
Brightford Stationers: take one month from opening balances through journal, ledger, trial balance, adjustments, statements, closing entries and the post-closing trial balance.
Statements in this challenge
- June TransactionsJournal Entry
- Cash AccountLedger
- Unadjusted Trial BalanceTrial Balance
- Adjusting EntriesJournal Entry
- Income StatementIncome Statement
- Statement of Financial PositionBalance Sheet
- Closing EntriesJournal Entry
- Post-Closing Trial BalanceTrial Balance
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IAS 1 — Presentation of Financial Statements
Work the cycle in its fixed order: journalise, post to the ledger, extract an unadjusted trial balance, pass adjusting entries, extract an adjusted trial balance, prepare the statements, then close the temporary accounts. Each step consumes the output of the one before it, so an error early on propagates all the way to the closing entries rather than staying local.
Common mistakes
- Preparing the financial statements from the unadjusted trial balance instead of the adjusted one.
- Closing permanent accounts — assets, liabilities and capital carry forward; only revenue, expense and drawings/dividends close.
- Forgetting that the post-closing trial balance should contain no income statement accounts at all.
Further readingIAS 1: what goes where in a full set of statements