Page 227 - F3 -FA Integrated Workbook STUDENT 2018-19

Preparing basic financial statements

Preparation of financial statements

3.1 Extended trial balance

Often, a working paper is compiled, the extended trial balance, to record the initial
trial balance, record journal adjustments (including accruals and prepayments)
followed by the draft statement of profit or loss and, finally, the draft statement of
financial position, The draft financial statements as prepared from the extended trial
balance can then be summarised and formatted in accordance with IAS 1
Presentation of Financial Statements.

An extract of an extended trial balance may look as follows:

Ledger account Initial trial Adjust Adjust SP&L SP&L SOFP SOFP
balance

Dr Dr Dr Cr Dr Cr Dr Cr

Op inventory X
Purchases X X
Revenue X X

Bank Loan X X
Cash at bank X X
Accruals X X
Prepayments X X
Retained X
earnings b/f
— — — — — — — —
(5)
Totals X (1) X (1) X (2) X (2) X (3) X (3) X (5) X
— — — —
(4)
Profit for year X (4) X
— — — —
(5)
X (3) X (3) X (5) X
— — — —

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