Effortlessly Bill for Excel for Accounting and Tax

Bill for excel for Accounting and Tax

hello everyone uh in this video you will learn how to do the complete accounting Cycles uh you will learn how to create a chart of account how you can create the general entries how you can create the dynamic Ledger by clicking on the single click and you will also learn how to prepare the trial balance you will also learn how to create an income statement moreover you will also learn how to create the balance sheet so all the counting procedures from catering from Journal journal to laser to trial balance and the financial statements everything you're gonna learn in this video so so if you have not subscribed to this channel yet please subscribe now and let's begin the learning of accounting procedures so let's start with a blank spreadsheet first of all we will create a spreadsheet which we'll call chart of accounts so every account that we are going to use in our general entries will must be listed in this chart of account sheet right so this is the first sheet calls chart of account now I will open a second sheet which I will call General entries General entries in general entries I will create uh my general journal where I will record all my transaction entries so let's create the journal first what I will need is a date description accounts save it credit comments if any so it's an open field right so I need a commands I need a debit and credit let me enlarge them I will need an account this will be linked from my chart of account uh this will be in open description and this is gonna be the date right let me convert this into a table in order to convert this into a table uh I will need to select uh my headings and then I will go on insert in insert I will click on table and I will select my table has header here and press ok so now you can see that this has been changed into a table now whatever entry you will be entering here will be go into this table uh what are the benefits of the table the benefits of the table is that we can customize it we have several features available in the design tab of the table we can also give a name of the table so here I am calling it my table underscope Journal so this is my journal table okay on the chart of account now I have to Define my chart of account so uh as you know that there are five main categories of any accounts right which are assets liabilities equity expenses and Revenue right we can further divide this Revenue into two accounts which are let me copy it somewhere so you can see at the letter State as well we can divide this Revenue into the revenue and the Contra Revenue right it's revenue and Contra Revenue assets can be divided into current assets and fixed assets so let me do it current assets X assets liabilities can be divided further into current liabilities and fixed liabilities right Equity will remain the same expenses will remain the same revenue and the Contra Revenue right if you are selling something the sale is revenue but if you receive your sales back means if you have a returns in yourself that's a contra revenue account right so I can say that this assets they are assets their liabilities their equity this is expense and the main heading is the main category is Revenue so I can switch the columns and I can name that this is accounts this is also accounts this is sub accounts right now here uh uh I have to open an individual accounts right so individual accounts example I'm going to make a first entry into my journal let's say my transaction is establish a business by ways investing rupees 1 million so my name is always and I'm going to invest 1 million into my business right in cash this is also important whether you are investing in cash or you are depositing in the bank or you are investing some kind of materials so you have to Define it because that's how you're gonna Park your uh assets into the accounts in your company so establish a business by always investing rupees 1 million in cash right and the data is also important on first Jan twenty twenty two right so on First and 2022 I'm going to invest 1 billion in cash into my business right so here I say so today is 1st Jan 2022 right and I can give a description that establishing the business so debit is 1 million because this is the cash that I'm receiving right so my account that will hit the 1 million by debit is a cash so if you want to give a command to an optional feel you can it's up to you right so first Jan 2022 now I have to give a damn impact because every debit has a credit impact and every credit has a debit impact so since I have given the debit impact I have to give the current impact as well so 1 million is coming into the equity always right I can repeat the same description okay so this account will hit by 1 million in credit and this account will hit by 1 million debit but these two account must be open in your chart of account because at the lateral stage I have to use them into income statement balance sheet to prepare them right so I just copying it at the right now and this inputting here right so cash is my current assets right so I just copy my current assets okay so this is uh that counts right sub accounts and this is the equity in cash is the equity account so I can simply copy and paste here okay so this is my Equity account so before doing any entry into this laser you must open this account here right so how you can do that you can simply select this column the right the column C then you will go on the data sheet and here you will go on the data validation on the setting tab you will select this as a list and the source you will selected as your individual accounts right and you can press ok so now you can see this has become a drop down so you can easily select them from your main accounts directly right so this will come in your chart of account first and then it will go in your entries right so now we have our general entry established chart of account settings established we can do more entries because in business we do entries on daily basis and that should be the part of your channel entries because this is the starting point from where your account starts so before doing further entries let's format this table further to make it look more good so let's say I can go on the design of this table and I have several option available here right uh so I can choose as per my desire um I think this looks good okay so this is the first entry that I have just recorded let's say now in my business okay I can also comma style them because that's more readability because of the more readability I can just make them a comma stand right so let's say now my business has a 1 million rupees in cash right and I instructed my accountant to go and deposit the half of the money into the bank right so we have to debit 5 million by the bank and the we have to debit the five lakhs by the bank and credit five likes by the cash if I go into accounts I do have cash but no banks so I have to go on my chart of account back right and here I will say okay this is my bank right if you have multiple account you can use like this okay for example one one double two is my bank account for example so I can call it this is my current assets right so current assets so now I can come back here and let's say I make an entry here I make a transaction here that deposit rupees 5 lakh into bang on second gen right so here my debit bank is bank right so you can see the table is expanding itself right I can say it okay deposit into bank on 2nd gen 2022 by rupees five lag similarly here I will select the cache because that has a credit impact five lag and deposit into bank and second gen right uh if you give a comment if you would like to give a command it's up to you let's say Mr uzair ran in bank to deposit so just for your information that this when you are doing this transaction you hand it over Mr uzair rupees 500 000 to deposit into your bank right so this is your second entry that you have just made in your leisure right now what are you going to do you are doing a sales and purchase business so if so now you have five lakh in hand five like in spank and now what you're doing you went to your vendor and asked him that you want some material right on the credit so here you're saying that purchase inventory of rupees 600 right 6 lakhs on credit from Mr bear let's see so purchasing now six lack of inventories on credit from Mr zubair Right again when you come here you don't have an inventory account you don't have Mr zubair account because now it will be a payable entry and you're purchasing the inventory so again come here right so you are entering inventory which is your current assets and Mr zubair because he is your vendor so this is your current liability account right so you go back to here and you are saying that okay I am going to purchase an inventory of rupees 6 lakh and I am purchasing for Mr zubair so his account will be credited by rupee 6 lag right purchased inventory right let's say this entry has been done on 3rd of Jan 2022. right so now you have a liability account established you have your another current assets account established right now you are doing what you you went to another vendor and purchased the inventory further this time you are purchasing by paying in cash through your bank right so purchased inventory of rupees 2 lakhs by paying through check from Mr Ahmed let's see so now your affecting account is your bank so you come here okay you have your inventory account established you purchase inventory of rupees 2 lakhs and here your affecting account is your bank and you paid rupees too like through your bank right so this is purchased inventory again so this is you're doing on let's say 4th Jan 2022. right so that's how your leader is growing uh your general entries are growing you are recording the daily transition that you are doing right now let's say uh this is time to sell right so now you have made a cell on cash right sold inventory per piece four legs right you you sold the inventory for rupees four lakh on cash on 10th Jan 2022. so here when I come back here I have an inventory account but I do not have a sales account right uh and I do have the cash account as well so I will need one is sales account and sales is my Revenue accounts and if you understand the accounting when we do the sales it is recorded as a credit because revenues are always spreaded winning phrases right so here you are receiving cash because you're making a sale for rupees four hundred thousand and against the sales battle peace four hundred thousand so you have sold the inventory for cash right on and Jan 2022. but when you do this entry you will also notice that your inventory is reducing because it is going out from your pocket now because you have already made a sale right hmm so inventory must be recorded at the price you have purchased so that is called cost of goods sold because this is the goods that you have sold what is the cost of that there are two method of recording them um one is perpetual and another is when you prepare your cost of source schedule at the end of the year and then you will do the adjusting entries to make it simple I'm going to record it right now I'm going to add two entries for this particular transaction one is receiving the cash against the cell right and another is I will reduce the I will reduce my inventory against the cost of goods sold so I need to create another individual account which is called cost of goods sold right and this is my expense account right so I can say that cost of goods sold for example the the goods that you have sold the value of that that you have purchased was three hundred thousand so one leg was a profit if you just compare the difference so let's say you purchase uh this particular inventory for rupees 300 000 so you just recorded 300 000 and you will reduce your inventory by 300 000 so uh adjust inventory against cogs cost of goods so right same day 10th of champ great now let's say uh you are selling further uh sold inventory for rupees let's say uh three hundred thousand on credit on 15th Jan 2022. so now you are selling the inventory further by rupees three lakhs on 15th of Jan so here again you are receiving cash no you're not receiving cash because you are selling on credit so to whom you are selling so basically you are let's say you are selling on credit to Mr uh Mr cousin let's see 115 yeah so here on chart of account you will make another individual account which we will call uh Chasm right and this is my current assets account because I need to receive the money from the sky so General entries I will record Mr kazim for a piece 3 lakh against the sales of rupees 3 lakh and I will say again the same Soul inventory on credit so this is the 15th Jan 2022. right so we are done till here and now I have to adjust my seogs of the inventory that I have sold to Mr kazim so let's say uh cost of goods sold I purchased this inventory let's say it's 150 000 right so I can say that cost of goods sold debit and inventory is credited by one like fifty thousand I had just inventory against cogs 15 Jan and 15 right so this is another transaction so now let's say now you receive an electricity bill paid electricity bill of rupees fifteen thousand so again you are paying now 15 000 your electricity bill you don't have any electricity account here so here we will open uh the account of electricity electricity electricity is our expense account right so I will come back to my general entries paid electricity bill by rupees 15 000 through bank right so we will select the electricity account rupees fifteen thousand and here we will choose our bank because we are paying through the bank is 15 000 paid electricity and this is here we will select eating uh Jan 2022 right now we are going to pay the salaries now I'm going I'm not going to enter uh the narration of every account here because I think we have established uh our understanding enough so now we are going to pay the salary so I need to select the salary account so I don't have it here so I will go here and say salary which is also my expense account and let's see I'm paying the salary through the cash so let's see I pay the salary of rupees 100 000 in cash so here I will also enter 100 000 right paid salaries so let's say this is the end of the month of 30th Jan 2022 right so if we look from a start till the end what we have just did we have established a business we have deposited the amount in the bank then we purchase the inventory we purchase the inventory again then we sold the entries where just the cogs then we sold the inventory again on credit yet just the cogs pay the electricity bill pay the salaries so let's say uh now I'm going to pay back uh the amount to Mr zubair which from which I have purchased an inventory of rupees 600 000 I'm going to pay the 50 amount to him so let's say or I'm going to pay a hundred thousand to him let's say so Mr zubair account will be debit since I'm paying the cash so my cash will go out from my pocket so it will be uh by it will be reduced and reduce will come into the credit so 100 000. and hundred thousand paid to Mrs Right so this is the liability account that we have paid on let's say second Feb 2022 and we have also purchased we have also sold our inventory to Mr kazim uh so now let's say he is paying me uh through the bank right three hundred thousand or let's say the 50 amount he's paying me back so in my bank I will receive 150 000 and this amount is coming from Mr cousin so I will reduce his balance by rupees 150 000 so I will credit his account received from Mr cousin right so this transaction is done on 15 Feb 2020 . all right so now what I'm going to do I'm going to prepare a laser through this journal entries what you need to do you have to put your cursor into this particular table you will go insert and create pivot table when you go on pivot table it has automatically input the name the table Journal which we have initially assigned the name to this table through the table design tab right and I want to create this pivot table into the new worksheet so I will select the new worksheet and then I will press OK so you can see a new sheet has opened I will reorder this sheet into the end and I will call it laser and please note using this I can also prepare a trial balance as well how I can do that please watch all my steps carefully which I'm going to do right in front of you so on this screen on the left side on the right side you are seeing a pivot table fields and here you are seeing an area where your pivot table is rest right so what I have to do I have to select I will need the date right you can notice that your date is splitted into Jan and fab right you can ungroup it by right click and click ungroup so now they have a speed date right now I'm not interested in description I am interested in accounts let's say so I will put my accounts into the rows right okay you will see your table like this so what you need to do you will put your cursor into this table you will go on the pivot table analyze and the design tab so you will go on the design tab here on the report layout you will select here and you will click show on tabular form on subtotal don't show subturo right and here you can say uh repeat all the labels right so all the dates are repeated right so this is now a good scenario now then you will put your debit here it should become as a sum they can right click on the field value field setting go on number format numbers use thousand as a separator and remove the 0 0 press OK right so now it's a comma for methods now you will take your credit you will do the same steps field setting sum and numbers and use thousand separator and zero decimal and press OK right and here you need a difference debit minus credit uh balance difference so what you can do you can put your mouse here on the top you will see two tapes which is called pivot table analyze and design you will go on pivot table analyze here you will go on field items and set and create calculated Fields here you can call it balance right and on the balance the formula you will see debit minus credit press add and OK right so this is something you will get like this right then you have to do what you will go on the sum of the balance tab here value field setting again go number format and here you will selected accounting here you can say none press OK and press OK you can see that every time you're making the changes uh the table where that you are setting again and again is going to change so how you can solve this issue first set everything then right click go on pivot table option and uncheck this auto fit column where don't update so press oks right so now this is the information by doing that you can further improve this by going on design Tab and you should give this one right I'm liking this one so I'm selecting this one so this is my account this is debit this is credit and this is the balance right then what I have to do what I have to go on the design uh pivot table analyze and click on slicer on the slicer you will select the accounts and press OK right so what you have to do let's say you wanna see the cash Ledger you will click on cash right so your cash balance is 700 000 right so now what you can do you can also input a description after the accounts right so this is now a good step right so when you select the cache now it's a perfect setting so you can see when I select the cache laser right so it says that okay on the first gen you establish a business you got a hundred thousand then you deposit five hundred thousand into the bank then you sold the inventory for 400 000 then you paid the salaries 400 000 and you pay to Mr zubair so now your closing balance you will always see the bottom lines your closing balance is seven hundred thousand right you can further reformat this by let's say pressing equal and Link it to this one right so this will become cash and you can just increase like that so you always have to select one account at a time you wanna see electricity electricity inventory inventory SIM card okay so your bank statement you can see your bank details right so you deposit the amount and everything so your bank has re-ended in 435 your inventory has 350 in your account you have paid 100 000 as a salary you you have say you have made a sale of 700 000 always remember the credit means Revenue right if it's a revenue account or over you can also show here which account it is okay so I can simply add a formula here on the top here again so vlookup I will select this there I will go on the table array I will select these two f and g and then press 2 and 0 and enter so basically uh this is my revenue account right so inventory is a current assets electricity is inexpense cash is your current assets right so you have the category from which this particular one belongs and everything is established and set ingly so you can prepare your laser ingly Now using the same sheet I am going to use a trial balance in order to prepare the trial balance just right click on this and copy this create a new copy and move to the end and I'm gonna call it trial balance on the trial balance we only show the balances we don't need a debit we don't need an account description or anything or date so first I will take out the rate I will take out the description right and on the slicer I will defilter them and on the top I will remove them and I will just call it trial balance right so this is the quickest trial balance you would have ever seen right so your balance become always zero so you can see what's happening accounts by debit and credit as well so yeah this is your trial balance I hope everything is clear so far we don't need this slicer we just remove that right on the back you are seeing this white grid line you can go on view and uncheck these grid lines see if you can do it on the later to look it more beautiful right General entries it's up to you if you want right so now we have the trial balance ready by using this trial balance I am going to create an income statement a very straightforward income statement right so when you have your trial balance ready I will need a few more information in order to prepare in order to prepare the income statement I will need this account's information right so before we do that further thing let's set up our income statement format uh just a brief income statement is a statement on a certain for a certain period of time we create the income statement where we shows our revenue and expenses only right and find what is the profit to us right so let's say this is the Excel doers limited company so on the top we always give the company name uh then we says income statement right right and he always prepare the income statement on a certain time for the period of let's say for a for the first for for the period first Jan 2022 to 31st March 2022. so let's say this is the income statement for the first quarter of the year right what we will need we will need all our Revenue accounts right so what I have to do is I have to fetch uh so I have to do some hidden working here so let's say I call it vlookup and I will select this account comma 0 then I will select my chart of account and I will take uh the sub account FNG column and press comma then two then comma then zero then comma then enter so this is my current assets it's my fixes right so if I look into the accounts like this where it should go where it should go please remember let me add one more thing here uh for your assistance right for your assistance that financial statement assets all go on balance sheet [Music] this is balance sheet balance sheet balance sheet balance sheet and they go on income statement right expensive revenues goes on income statements so coming back here uh I will again fetch this information uh by this sub accounts right I have this sub account ready here so I can just apply vlookup on this press comma and then I will go here and column C to E I will freeze them comma three comma zero enter so let's say which account will go where so these two accounts will go income statement and these two accounts Will Go On income statements they are all expenses accounts right and this is our revenue account right so our income statement always starts with sales right let's always start with sales so how much sales we have done uh we can simply take a vlookup on sales comma like this first set one two three and four okay this is the fourth now you freeze them comma four comma zero then close the bracket okay so you see that because it is a credit balance so I will always receive in a negative so actually it's not a negative so because the credit entry that's why we are seeing it negative so simply you just do what you will press the start which is a multiplication sign in Excel and do minus one and enter right after doing that it will become a positive number it will reverse the sign so you can simply increase give a comma separation and reduce the decimal so what we have done we have done a sales of rupees 700 000. then time comes for cost of goods sold right so now we have to do a cost of goods sold so you can again see if I go on trial balance I have a cost of good Souls you can see it's expensive to go income statement right so this is 450 000 amount right and this should be negative because we have to reduce that right so all the signs will be flipped in your income statement right so I will simply copy the above formula and paste it here right and it is giving me not applicable errors the reason can be uh the difference of the spelling so it's a course of goods sold as sorry so this is my badge let me correct it it's a good Soul so this is 450 000 so when you reduce the sales from the cost of goods sold it will give you a gross profit okay this is the standard income statement practice I can reduce the format to the down right and this plus this it will give you 250 000 as a cross profit you can further format them right uh you can increase the size you can add a line here right so now we have a cost of goods sold ready right now this time for the operating expenses operating expenses right we can underline them right so we have to list all our operating expenses so if I go here on my ledger right the cost of goods sold is already done revenue is already done so I have left with this salary I am left with this electricity bill right so these are two my operating expenses so salary and elect tree series right so same formula you can copy and paste here right uh you can remove this sign here because we are going to Total them and for them we will reduce them so we will come a column before here for a presentation purpose that's how uh on standard we prepare our income statement when we list down all the expenses right so we can put a line here on the top and we will do the total here and we will call it total of operating profit operating expenses right so if you sum them 115 000 right this is 215 000 right and from that you will deduct and you will come on operating profit right so simply this minus this enter so you can do multiply minus 1 here and simply plus them okay for a better presentation so this becomes your you can add a line here this is the all the formatting settings that you will have to do right so how you can do that you can simply right click go on hide and let's say make it 30 13 is very small right click hide and make it let's say 20 or furthermore yeah this looks better you can centralize them right perfect so now I have the operating profit Ray right this blank line I can reduce the size okay from the operating X profit this is the play this is the profit from which we do pay the taxes so if you know uh the taxes so let's say the tax is 15 percent 15 percent so you can apply a standard 1.15 percent here right so this is your 15 tax into minus 1 right and then you can simply copy the bugline and paste it here and you can call it net profit and you can sum this plus this right and this line in accounting when you do the closing amount you just do the double line at the bottom go on The View and remove the straight line so now this is your income statement uh ready you can centralize the values right and further reduce them and expand it from here right perfect so this is a good income statement example right if you want to give a border to this you can give a dark border here right like this on the top if you left the line and from the right if you will left the line it will give you a good feel of the presentation right so this is your income statement ready or you can further hide this column not hide it just reduce the width of it okay perfect so we just made a perfect uh income statement and this entry that we have just made we have to make this entry into our laser as well because all entries must go in the later so X is twenty thousand two fifty so twenty thousand two fifty twenty thousand two fifty Okay so this is uh the Texas which is the expenses already the power of income statement and this one is uh payable through government able to the government this is we just call it government and this is our liability accounts so this is my current liabilities I know this video is getting a bit longer but you at the end of this video you will come to know everything that involves how to process the accounting steps right so now if I come back here and right click and refresh it so I have this new blank account open let me go and check because I did not enter here that this is the tax expense and this is payable to the government payable taxes to government right on let's say 30th March 2018. simply go back here right click and refresh so you have two new accounts you can simply copy and check it here okay so this will departure liabilities and this is already the part of income statement so we have successfully parked all our expenses into the income statement right and this income statement is done now this is the time to prepare the balance sheet right so after this you have all everything in order and a good accounting uh steps that we will we have followed and completed all the procedures right so let's say on the top we have Excel doors limited again Excel doers limited balance sheet the balance sheet is not for the period balance sheet always created on a particular date so if I'm preparing today so it shows the position on certain date so we will not say for the period we will say as on uh as on 30th March 2022 so on this particular date I am going to prepare uh so I just merged them right so I will bold them increase them uh make a good formatting of it it's very important for the presentation purpose right so Excel words balancing okay so balance sheet has two parts divided into two equal parts in order to prepare the balance sheet always remember this equation assets are equals to liabilities plus equity so assets has two parts one is assets and another is liabilities and equities right so we have to divide our balance sheet into two section assets and liabilities left to right okay so let's count how many cell they are one two three four five six seven eight nine so let's add another column 10 right okay so we can one two three four five okay so this five cells I can add a border here and this five cell I can add a border here right so I just divided my uh balance sheet into two parts here I am going to list all my assets in here I'm going to list all my liabilities Plus liabilities and equities right as a standard practice okay so I will increase the size of it right as a standard practice we always list fixed assets first right fixed assets so if I go on my trial balance so my fixed assets are nothing there are no fixed assets uh in order to understand our concept let's create a fixed assets so let's say I'm going to purchase a shop and this is my fixed assets right and I will make an entry here right I will add a two line here because I will do at the middle of that period so let's say on 10th Feb purchased shop the shop is a fixed assets so I purchase a shop it will not affect our income statement because this is asset to asset transaction there has nothing to do with the income statement so don't worry what we have done income statement right so let's say purchase a shop for hundred thousand against the cash right so this is the cash purchase the shop on 10th Feb 2023 sorry 2022 2022 so go on trial balance right click and refresh you have a new account open which is called uh shop your cash balance is reduced by 100 000 so let's say copy and close so this will go on balance sheet and this is your fixed assets right so this is the first account that I will take into the balance sheet right shop just correct them okay let me write again uh so you guys see again so we look up I'm selecting the shop comma my table is this one right one two three four fourth column I will freeze that comma four comma zero close the bracket enter so here I have my shop right then I will do what I will go on to trial balance and check again is there any other fixed asset account no fixed assets accounts right so simply one hundred thousand so total of fixed assets so this is basically some of this right so as simple as that we can increase some size of it we can pull this because this is the total values right and we can put a line on the top right so this is the total of fixed Assets Now I'm going to add a current assets right for the current assets same formatting now we go in trial balance and see if there are many current assets so okay they are all my current assets current assets right this one is done let me color it okay so here I have these two let me copy them and add it here if I go back on the trial balance again these are also my current X search so I will copy them I will put them here similarly I will go back and see is there any calls any else currents assets so no current assets so they are also done right so coming back here uh coming back here uh I will repeat the same formula again here so all the balances are now here and this one I can copy and paste here and update this formula sum and select all of them so this is the total of my current assets current assets right so now I will total them so total of assets are this plus this right so you can take the formatting of the same and always to the double lining sorry always do the double lining when you are doing the final tour right so this is the total assets by summing these two right when we will prepare this site remember our equation asset is equal to Lively spreads Equity when we'll enter our reliabilities and equities here the answer will exactly come as 1635. if the answer is not coming the same that means you have not prepared your accounts correctly you have not prepared the financial statements correctly so let's see let's start with the liabilities right fixed liabilities right let me add a line here and let's call it liabilities right so first I am going to enter a liability in a liability I will enter a fixed liability right we can also give some indentation here that is more beautiful right the indentation will put everything within the assets right so same thing here uh I can add two indentation right so liabilities and Equity so liabilities fixed assets fixed liabilities so if I go on my excuse me okay so if I go into my trial balance and see is there any fixed liability so fixed liabilities are usually long-term loans and these kind of stuff so there is no fixed liabilities so we can just put up zero here right put a zero it will become Dash right then we have then we have current liabilities right on the current liability tab if I go into my trial balance again so I have two current liabilities so one is Mr zubair so I'll paid I will paste Mr zabane name here and another one is government right so I will type government here I will take the formula okay let me fix them this one is the column right so again the liabilities will become as a negative so you can input a minus one here so this is your total of liabilities you can copy this from here and you can call it total of current liabilities which is the sum of these two right [Music] let's collect the formatting like this [Music] so total of liabilities total of Library current liabilities now we will sorry now we will do what we will do total of liabilities total of liabilities I will bring my indentation one step back so the total of liabilities are also the same as uh the current liabilities because there is no fixed liabilities now we will do what we will add one step back equity right you can bring your total uh to the end because both router will come at the one line okay so if I go on my tribalance again this one is also done I have only left with the equity account which is the query always right so if I go and copy it and bring it to my balance sheet and input here right so and if I copy here I have to expand this column a little bit so 100 1 million is my initial investment right please note that this profit The Profit that you have made is the is will go in your pocket and your pocket is the equity right you have just found that you have made a profit of one one four seven five zero right so this should go in your pocket so you will say retain earnings so if you withdraw this amount right then we call it as a dividend but since you are keeping this money in your business because this amount is the additional money that you have made from your investment initially so this is your net profit so this point is important you will connect this with your net profit this is the earning that you are still retaining in your income this is the profit that you have made so the total of a query so the total excuse me the total of equity total of equity will be this right so here when I will sum this and this the answer should be this so where I will call it total of liabilities plus equity okay one and then back this plus this the answer is coming exactly same as this right so that means we have prepared our balance sheet perfectly so you can go on The View remove the grid lines right now you can do the settings if you want but try to keep both the column uh at the same size so they looks equally distributed just do this too expand them right so this is a great example of preparing the assets and liabilities and equities and balance sheet income statement trial balance everything on a single stream at your balance sheet has successfully prepared everything is linked right so if you have not subscribed to this channel yet please subscribe now so you keep getting more informative video like this