Financial statements

Makronexus financial statements are server-computed views of posted General Ledger activity for a selected school, date range or as-of date, and currency. They explain performance, financial position, and cash movement. They do not replace source ledgers, journal evidence, close review, or statutory policy.

Audience: accountants, finance managers, school owners, auditors, implementers, and support analysts
Learning time: 45 minutes
Navigation: Trial Balance, Income Statement, Balance Sheet, and General Ledger → Cash Flow
Boundary: statement presentation and accounting meaning are P5. Broader KPI reporting, consolidation, statutory packs, and management-report design continue in P7.

Learning outcomes

You will be able to:

• distinguish as-of statements from period statements;
• explain the income statement, balance sheet, and cash flow response structures;
• reconcile statement rows to the trial balance and journals;
• interpret retained earnings and balance status cautiously;
• compare periods using consistent filters;
• identify classification, cut-off, currency, and source defects;
• preserve statement review evidence for close and audit.

Statement set

The income statement returns revenue rows, expense rows, total revenue, total expenses, net income, period start/end, and currency.

The balance sheet returns assets, liabilities, equity, retained earnings, total assets, total liabilities, total equity, isBalanced, as-of date, and currency.

The cash flow response supports direct or indirect method, sections and lines, net cash flow, optional opening/closing cash, and reconciliation data.

Prerequisites

Requirement	Evidence
Reviewed trial balance	common ledger input
Correct school and currency	statement scope
Approved dates	as-of or period boundaries
Period/tie-out status	close context
Chart of Accounts classification	account type and mapping
Journal read access	drill-down
Statement permission	gl:statements
Accounting policy	retained earnings, cash classification, comparative presentation

Roles and exact permissions

Action	Exact ability
Run statements	gl:statements
List journals for drill-down	gl_journal_entry:list
Read journal	gl_journal_entry:read
List accounts	gl_account:list
Read account	gl_account:read
View month-end evidence	month_end_tie_out:read
View readiness	finance_control:readiness

Current statement pages may use broader frontend fallback checks. Configure and test the API ability rather than assuming financial_payment permissions are an accounting-report role.

Date semantics

The trial balance and balance sheet are as-of statements. They include posted activity through the selected date according to the backend contract. The income statement and cash flow are period statements with from/to dates.

Do not compare an as-of balance with a period movement without explaining the different measurement basis.

Income statement procedure

1. Select the school, currency, period start, and period end.
2. Confirm periods and cut-off are appropriate.
3. Run the server endpoint; do not calculate totals from visible rows in the browser.
4. Review revenue and expense account classifications.
5. Compare total revenue, total expenses, and net income with expectations.
6. Drill into material, unusual, or opposite-sign balances.
7. Identify manual journals, reversals, late postings, and mapping changes.
8. Compare with the prior period using identical methodology.
9. Cross-reference net income/retained earnings treatment in the balance sheet.

Balance sheet procedure

1. Select the school, as-of date, and currency.
2. Confirm the trial balance is reviewed through the same date.
3. Review assets, liabilities, equity, retained earnings, and totals.
4. Verify the server’s isBalanced result.
5. Investigate suspense, clearing, negative assets, unusual credit/debit balances, and stale balances.
6. Trace material rows to journals and sources.
7. Compare control accounts with month-end tie-outs.
8. Record whether any reconciliation-dependent cash/bank amounts remain provisional.

Cash flow procedure

1. Select period, currency, and approved direct or indirect method.
2. Review operating, investing, and financing sections.
3. Verify net section totals and net cash flow.
4. When opening/closing cash and reconciliation are returned, compare computed and reported closing values.
5. Trace large lines to accounts and journals.
6. Confirm cash-account classification follows approved policy.
7. Do not treat cash flow as bank reconciliation; it is an accounting statement.

Worked scenario: Mupfure Learning Academy

For August, Mupfure’s income statement shows tuition revenue, transport revenue, payroll expense, utilities, and depreciation. Net income is positive. The balance sheet balances, but the bank clearing account remains material because statement matching is not complete. The accountant labels the balance as awaiting P6 reconciliation and does not describe it as confirmed bank cash.

The indirect cash flow begins with net income and reflects non-cash and working-capital movements according to the backend response. The reviewer traces the largest movement to receivables journals and confirms the date range.

Statement reconciliation

Statement item	Reconcile to
revenue/expense row	trial-balance account and journal activity
net income	total revenue less total expenses
asset/liability/equity row	trial-balance account balance
retained earnings	backend statement logic and accounting policy
cash-flow line	classified GL accounts/journals
opening/closing cash	prior/current balances and response reconciliation
control account	month-end source/subledger tie-out
bank/clearing account	P6 bank/provider reconciliation

Accounting impact

Statements do not post journals. They read posted ledger evidence. If a statement appears wrong, fix the underlying source, mapping, journal, account classification, date, or currency through governed workflows and regenerate the statement. Never edit an exported spreadsheet and treat it as the corrected Makronexus statement.

Controls and audit evidence

Retain statement type, school, dates, currency, method, zero-balance setting where applicable, request ID, generation time, totals, balance flag, row-level export, reviewer notes, drill-down journal IDs, tie-out references, period state, and version of accounting policy.

Country-specific statutory layouts, tax treatment, inflation accounting, consolidation, and audit opinions are outside this verified P5 product baseline unless separately configured and approved.

Failure modes

Symptom	Likely cause	Evidence	Safe action	Escalate when
income statement net income unexpected	wrong period, classification, late/reversal/manual journal	filters and drill-down	correct root evidence	rows/totals contradict journals
balance sheet not balanced	retained earnings/calculation/data defect or unbalanced source data	trial balance and response totals	block close and investigate	trial balance balanced but balance sheet does not
cash flow does not reconcile	classification, opening/closing balance, method, or backend issue	sections and reconciliation object	inspect accounts and method	same ledger inputs remain inconsistent
statement row missing	wrong date/currency/school or account type	filters and account record	rerun with correct scope	qualifying posted balance absent
export differs from screen	stale snapshot or formatter defect	request IDs and rows	refresh and regenerate	same snapshot differs
bank balance assumed confirmed	accounting cash confused with external bank evidence	reconciliation status	label as unreconciled and hand to P6	users report it as settled

Verification checklist

• Statement type and measurement basis are correct.
• School, dates, currency, and method are recorded.
• Trial balance uses the same cut-off.
• Revenue/expense classifications are reviewed.
• Assets, liabilities, equity, and retained earnings are reviewed.
• Balance flags and totals are retained.
• Material rows trace to journals and sources.
• Control accounts tie to source evidence.
• Cash-flow sections and reconciliation are reviewed.
• Reconciliation-dependent balances are labelled.
• Export matches the reviewed server response.
• Statutory claims are not inferred from generic statements.

Practice and knowledge check

Guided practice: produce all three statements for one month in a test school and trace five material rows to journals.

Independent scenario: the balance sheet balances, but the bank account differs from the bank statement. Explain what P5 proves and what P6 must prove.

1. Which statements are as-of and which are period-based?
2. What does the income statement measure?
3. What does balance-sheet isBalanced prove?
4. Why is cash flow not bank reconciliation?
5. Which permission runs statements?
6. How should statement errors be corrected?
7. Which reporting topics remain for P7?

Answer guide: trial balance/balance sheet are as-of; income statement/cash flow are period-based; income statement measures revenue, expenses, and net income; balance status checks accounting equation under server logic; cash flow is GL classification; use gl:statements; correct underlying governed evidence; broader KPIs, consolidation, statutory packs, and management reporting remain P7.

Phase completion

P5 is complete when the learner can prove source-to-journal lineage, review balanced journals, govern posting changes, interpret the trial balance, execute a controlled period close, and produce statements without confusing accounting evidence with external reconciliation.

Continue to P6 when published for bank statements, matching, provider settlement, reconciliation exceptions, and webhook monitoring.