Consider this article as a language course. In the end, you must master accounting in Romanian. I will try to turn it from rather boring and technical language into an easy to follow method of staying on top of things.

I will help you get answers to some basic questions related to understanding the meaning of countable numbers in Romanian. The tutorial is about reading one of the most basic accounting results: the month-end trial balance.

Accounting gives answers to many questions, but the crucial ones are:

• What is my turnover?

• Is the company making a profit?

• How much money do I have?

• How much money do I have to pay in the short term?

• How much money can I receive in the short term?

If you are doing business in Romania or considering doing business in Romania, it would probably be a good idea to be able to answer these basic questions and understand how your business is performing.

Financial statements are prepared in Romania only twice a year, so if you want timely information, you should learn to read a trial balance. A trial balance is prepared at the end of each month, but be careful: accounting is just another way of studying history, so what you get at any given time is the last month’s figures at best. .

The Romanian trial balance format generally has 4 columns, each divided into 2 sections: Debit and Credit. Think of it this way, balances on the debit side show the assets of the business, that is, the things the business spent its money on, while balances on the credit side show where the business got the money from.

The first 2 columns of the trial balance reflect the beginning balances of your company’s accounts, the next 2 columns the monthly movements, the next 2 reflect the movements from the year to date, including the opening balances, while the last 2 columns show your company’s ending balances. accounts.

The trial balance is a collection of all the accounts used to record business transactions, divided into classes. In Romania, each account is assigned a number and it is not uncommon for accountants to speak only in terms of account numbers, which makes their life more complicated.

However, if you know some numbers, you can solve them eventually. I will point out the numbers that best answer the key questions.

Accounts that start with the number 7 show revenue and accounts that start with the number 70 show sales, so if you want to know your total sales, add up the accounts that start with 70 and this should be your billing. Then we can mark question no. 1.

An important aspect regarding Romanian accounting regulations is that we carry over expenses and income to profit and loss at the end of each month, so a Romanian trial balance will never show the balances of the expense and income accounts, i.e. class 6 and 7 accounts. If so, it means you have an incomplete or incorrect trial balance.

Now for the question no. 2, “Is my business making a profit?” Just check account 121, which is the profit and loss account. If your balance is on the credit side, that means your business is making a profit, if the balance is on the debit side, that means your business is making a loss. Another possibility to verify if the balance in account 121 is correct is to add all the accounts that begin with the number 7 and subtract the sum of all the accounts that begin with the number 6, in the columns of the year to date. 7 points to income and 6 to expenses. If the amounts in class 7 are higher than those in class 6, you should be relieved – your business is making a profit.

We can also mark the questions no. 2.

Moving on, you want to know how much money you have on hand. That’s simple – just check the ending balance column for the accounts in class 5 that show values ​​on the debit side. The result should answer the question, unless you have been withdrawing money from your bank account for discretionary use and your accountant has accumulated money in the petty cash account.

Accountants usually do that, it’s not their fault, they just follow the double-entry rule (each transaction is posted to two accounts, so if money comes out of the bank account and you didn’t tell the accountant where it went, your accountant will. ). of course, suppose you are in petty cash, that means you have the money available).

The next question is more complicated because the money you have to pay is spread over a lot of accounts (it shouldn’t be surprising, since you have to pay a lot of people: suppliers, employees, not to mention the taxes owed). To find the answer, check the accounts in class 4 of the trial balance that show an ending credit balance. Generally, all accounts payable are recorded here. You may also have some short-term loans, so add the amounts in the second column from right to left for class 5.

The last question I am going to answer is about the money you can receive. Just check class 4 again, but this time look for the accounts that show an ending debit balance. Those are the amounts the company expects to collect.

That should wrap it up! If you need a more detailed explanation, just give us a call and make an appointment. We will be happy to help you, after all our motto is “Guide your investment in Romania”.