Adjust ALL 3 Financial Statements in 5 Minutes!
Oct 13, 2026 · 7 min · 7 segments
- Speakers
- Bill HannaHost
- Top entities
- Enterprise resource planning
- Show signals
- SuitabilitySafeBiasNot politicalAudience≈3k followers
Oct 13, 2026 · 7 min · 7 segments
Okay, so we're looking at the set of financial statements that I was ready to share with investors for Wakanda Power Inc.
Now, the first thing we're going to do before I go ahead and topside my financials is ask for an actual support from my CEO.
So I'm going to ask him for the agreement that shows that we are liable for $50,000, just so I have support here for what I'm doing.
Okay, so basically what we need to do here is look at where in the financial statements, the accounts that are gonna be affected.
So when you accrue for an expense, you debit expense and credit accrued liability.
So essentially when you look at the income statement here, we hired an engineer, so it's gonna be in research and development expense.
So I have here accrued expense liability, right? And then what else is going to be affected? So on the cash flow statement, this is going to change my net income or loss because we added an expense, right? And it's going to change here.
Nothing here happened with cash because we're only accruing an expense as a liability for the year.
It's going to get paid in 2026. so no change on the net effect on a cash flow statement and this file here by the way is going to be available for download go ahead and get the link down below in the description all right so let's come up with the journal entries that we're going to topside the financial statement with so the debit is going to be to an expense account and the credit is going to be to a liability so credit accrued expense liability okay the amount is going to be fifty thousand dollars as we said right for the debit and the credit okay So now that we have the debit and credit, let's go ahead and implement it on the financial statements.
Okay, so we're looking at the set of financial statements that I was ready to share with investors for Wakanda Power Inc.
Now, the first thing we're going to do before I go ahead and topside my financials is ask for an actual support from my CEO.
So I'm going to ask him for the agreement that shows that we are liable for $50,000, just so I have support here for what I'm doing.
Okay, so basically what we need to do here is look at where in the financial statements, the accounts that are gonna be affected.
So when you accrue for an expense, you debit expense and credit accrued liability.
So essentially when you look at the income statement here, we hired an engineer, so it's gonna be in research and development expense.
So I have here accrued expense liability, right? And then what else is going to be affected? So on the cash flow statement, this is going to change my net income or loss because we added an expense, right? And it's going to change here.
Nothing here happened with cash because we're only accruing an expense as a liability for the year.
It's going to get paid in 2026. so no change on the net effect on a cash flow statement and this file here by the way is going to be available for download go ahead and get the link down below in the description all right so let's come up with the journal entries that we're going to topside the financial statement with so the debit is going to be to an expense account and the credit is going to be to a liability so credit accrued expense liability okay the amount is going to be fifty thousand dollars as we said right for the debit and the credit okay So now that we have the debit and credit, let's go ahead and implement it on the financial statements.
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