 be ready to process the next month. In other words, revenue and expense accounts should only go up over a certain time period. If we wanna count what happened during the month of February, we cannot start with the January numbers. We have to make them zero as we did here. We took it out and we made it zero. So we did that and we made all of these accounts zero as of after we recorded all the journal entries for January and we had a post-closing trial balance which in essence was just the balance sheet or permanent accounts, these accounts up top. Now that we go back in here and we look at it and we go through all these accounts which should be zero, we all of a sudden have, hmm, this account just popped up and it's not zero anymore and this account just popped up. Of course, the 15 bank rec and the miscellaneous and those are gonna be items that we have now adjusted and therefore it throws off our closing process. We no longer have the correct closing entries over here because we used the prior balances. We're out of the closing processes wrong by the 15 and the 80. So that's just to show that this beginning balance then is not correct when we look at the trial balance for the next month. So let's go look at the next month now and see if we can make sense of this just to make sense of this problem. We're gonna go to the trial balance for February and then we'll go to the financial statements. I'm scrolling back to the financial statements. So we're going to the left and we're looking for the financial statements on the left and here are our financial statements. We have the balance sheet. It's in BW through CC. These are gonna be our items here. What has changed here? Note if we scroll down to the statement of equity, we see the beginning balance in the equity section being this 144, 175. That should match the ending balance that we have for the first month, the month of January and there's gonna be a problem between those two. If we go back to January, this number here, 144, 175 should match the ending number for January. Let's go back to the first tab and the trial balance. We're back to the trial balance and we are over in BW to BY and the financial statements. This ending balance, this 144, 80 doesn't match what we have. If we go scroll back, this is the ending balance for January which should match our beginning balance going back to the third tab, the trial balance for February. That should match our beginning balance. It doesn't and the reason is because we made that adjustment to the financial statements afterwards, let's see where that adjustment is just on this worksheet to see where the nature of that problem is if you run into this problem and you will if you work with QuickBooks or financial statements much and we will then see that those two adjustments happen to miscellaneous expense and the bank service charges. So if we go through these expenses, note they all have zeros, zeros and all the expense accounts, zeros and all the expense accounts but miscellaneous now has a beginning balance of 80 and that doesn't make sense for an expense account. It should be zero because we're starting from zero and counting forward for the month of February. We of course see the same problem for the bank service charges. That should be zero, it's now 15. Where are these being drawn from these amounts? They're coming from the tab of January close and that cell I-28. So if we go back to the January close tab, we see the 15 here and the 80 here. That's where they're being drawn from and that's where the problem is happening. So we're gonna go back to the trial balance. Now we're gonna go back to the financial statements so I'm gonna scroll all the way back to the top and then go to the right till we see these financials. Here we are in BW to CC. And the bottom line of this is that the financial statements, if we're thinking about a two month time period, are okay, they're correct, they're in balance, total assets still equal, total liabilities plus equity. We're not out of balance. The only problem we have is that if we had printed the financial statements for January, then our equity at the beginning balance of equity is scrolling back down to the equity. The beginning balance here in February will not match the ending balance of January and that could cause a problem. So generally what we wanna do is do the bank reconciliation soon after the close of the month, make any adjustments we need to and then close the month and be very careful about recording anything prior to that. If we do find an adjustment like this and we need to fix it, then it may be possible to expense those items in the following month in February so that our beginning balance ties out and we still have at least recorded these expenses in one of the two months.