Introduction of Financial Statements
Financial Statement:
A Summary report which quantitatively describes the financial health of a company
Purpose of financial Statement:
The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise to the shareholders and lenders. it is useful to a wide range of users in making economic decisions.
Components of Financial Statement:
Profit & Loss Statement / Income Statement
Retained earnings Statement
Balance Sheet
Cash Flow Statement
Profit & Loss Statement / Income Statement:
The income statement is a summary of the operational activities of a company during a certain period of time. It shows how the net income of the firm is arrived at over a stated period.
Types of Income Statement:
Single Step Income Statement:
It consists of two groupings: revenues and expenses. Total expenses are subtracted from total revenues to arrive at net income or loss.
Multiple Step Income Statement:
It separates the operating transactions from non-operating transaction, and matching costs and expenses with related revenues. It highlights certain intermediate components of income.
Condensed Income Statement:
A condensed income statement is one that summarizes much of the income statement detail into a few captions and amounts. Details of these captions are present in Notes to account.
Retain Earning Statement:
The financial statement which calculates the balance of retained earnings at the end of the period is called the statement of retained earnings. It is very similar to the statement of changes in equity however it only shows how retained earnings changed during the period.
Your Company NameRetained Earnings StatementFor Month Ended June 30, 20XX | Beginning retained earnings, June 1, 20XX | | Add: Net income | | Less: Dividends | | Ending Retained earning, June 30, 20XX | |
Balance Sheet:
The balance sheet is a snapshot of the
A Summary report which quantitatively describes the financial health of a company
Purpose of financial Statement:
The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise to the shareholders and lenders. it is useful to a wide range of users in making economic decisions.
Components of Financial Statement:
Profit & Loss Statement / Income Statement
Retained earnings Statement
Balance Sheet
Cash Flow Statement
Profit & Loss Statement / Income Statement:
The income statement is a summary of the operational activities of a company during a certain period of time. It shows how the net income of the firm is arrived at over a stated period.
Types of Income Statement:
Single Step Income Statement:
It consists of two groupings: revenues and expenses. Total expenses are subtracted from total revenues to arrive at net income or loss.
Multiple Step Income Statement:
It separates the operating transactions from non-operating transaction, and matching costs and expenses with related revenues. It highlights certain intermediate components of income.
Condensed Income Statement:
A condensed income statement is one that summarizes much of the income statement detail into a few captions and amounts. Details of these captions are present in Notes to account.
Retain Earning Statement:
The financial statement which calculates the balance of retained earnings at the end of the period is called the statement of retained earnings. It is very similar to the statement of changes in equity however it only shows how retained earnings changed during the period.
Your Company NameRetained Earnings StatementFor Month Ended June 30, 20XX | Beginning retained earnings, June 1, 20XX | | Add: Net income | | Less: Dividends | | Ending Retained earning, June 30, 20XX | |
Balance Sheet:
The balance sheet is a snapshot of the