This file shows a spreadsheet approach to building up a balance sheet.
- On the far left you have the names of the nominal accounts (or “boxes” in the language of the charts in chapter 2).
- In column E, you have the starting balance sheet, which in SBL’s case is a column full of zeroes.
- Columns F to V contain each of the 17 transactions we entered to create the SBL balance at the end of the company’s first year.
- Finally, column W simply adds up the 17 transactions and the starting values for each line to give us the ending balance sheet.
Setting out a series of transactions in this way can be helpful when trying to understand the overall effect of those transactions. You can, although I strongly advise against it, actually keep the accounts of a simple company like this.