Rounding in Financial Statements
To make things easier on the eye, figures in financial statements are rounded to the nearest dollar. Instead of displaying $267.39, they will show $267, for example.
Because of this, the rounded figures may not add up to the displayed total. The cents are just hidden, not ignored.
Example:
Your Statements are showing the following:
Expenses:
Wages $ 56,379 (actual:$56,379.49)
Office Expenses $ 1,533 (actual:$1,533.35)
Total $ 57,913 (actual:$57,912.84)
The rounded wages and office expenses only add up to $57,912, not the $57,913 shown. However, all individual figures are clearly stated correctly rounded.
Some people find this undermines the credibility of the financial statements, or object for other reasons. The choices are:
1.) Display cents for all figures.
2.) Display one of the figures rounded incorrectly (for example, $1,534 for office expenses) to make them add up to the desired total.
3.) Accept as is.