After sitting down to watch Maria’s video for step 5 I felt a little confused, finding the information in my income statement and balance sheet was easy enough – but figuring out how to actually balance the figures was where I had some trouble. Unlike Maria’s the two accounts I was trying to balance were a mix of a debit and a credit and when I deducted all the necessary amounts it was not balanced. Maria’s doesn’t either, we must not be done so like her I reversed all of my equations and still it didn’t balance. My brain was about ready to explode because I couldn’t figure out why my trail balance was out by £0.6M! It took some initial trial and error, but I finally had an epiphany – because the two accounts where everything was closed off to were a credit and a balance I had to reverse the equations in only one formula not both. The credits deduct the credits and vice versa. I think this will be something that I won’t forget.
Another issue I found when identifying the relevant data was the adjustments made for the operating profit and if I was required to input that data or how. In the end as I was using the totals and not the adjusted totals, I opted to not include the data and my trial balance balanced.
My discussions with others focused on giving and reading opinions and challenges for step 5, while it is interesting to see just how everyone felt during the process, I do feel that I did not gain much during the comments and discussions. In comparison to previous subjects, where we had physical classes and face-to-face discussions, I found it challenging to have a discussion when I wasn’t 100% confident or sure in what I was wanting or trying to say.
Accounting 101 