Financial Statements

Financial Statements

1. Financial Position: Balance sheet

   • Assets/Liabilities/Shareholders' equity
     • Assets
       • Liabilities
         • Payable/Unearned Revenue
       • Cash/Trade Receivables/Prepaymetns/etc...
     • Equity
       • Share Capital/Retained Earnings
   • Assets = Liabilities + Shareholders' Equity
   • Statement of Financial Position

2. Income Statement

   • Revenues less expenses in accounting period
     • Typical Accounts
       • Revenues: Sales, Fee, Interest Rent
       • Expenses: Wages, rent, interest, etc...
   • Profit Added to -

3. Statement of Retained earnings

   • Accumulation of profits not yet distributed
   • Retained Earnings from Previous Year
     • Plus: Yearly Profits
       • Less: Dividents
         • +/- Other changes
           • Ending Retained Earnings
             • Retained Earnings
   • Ending retained earnings -

4. Cash Flow Statements

   • Inflows and outflows of cash in operating, investing, and financing
   • ENDING CASH BALANCE: Into balance sheet

5. Closing the books

   • Closed (temporary
     • All Revenue Accounts
       • All Expense Accounts
         • Dviidends
   • Permanent (Open)
     • Assets/Liabilities Accounts
       • Equity

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