1 Flashcards
What does the balance sheet show?
- Shows equity (Capital) in the business
- It is the accounting equation in a financial statement form
Assets=Liabilities+Equity - Balances in the account are as of a specific date (31 December 22)
Balance sheet shows assets as what?
As their total
Balance sheet can be referred to as what two terms?
Statement of financial position
Or
Statement of financial condition
What feeds into the balance sheet?
The income statement
What are the two subcategories for equity?
Income and expenses
What question does the income statement answer?
What was my net income (profit) within a period of time (1 Jan- 31 Dec)
The income statement is a summary of what?
Revenue, costs, expense and net income (loss) of a business over a specified period of time.
Revenue can also be called what?
Sales, income depending on the industry
Net income formula for the income statement
Revenue-costs-expenses=net income
Income = intervals of Time or I&I
Where is net income transferred to in the balance sheet?
In the equity sections
Income statements are temporary and get closed out
Statement of cash flows definition
A statement that provides the information :
Where did my cash come from?
Where did my cash go?
The statement of cash flows breaks into what 3 categories?
- Operating activities (day to day operations)
- investing activities (buying equipment)
- financing activities (taking a loan to buy equipment or build something)
Three major statements that bookkeepers provide to owners:
Balance sheet
Income statement
Statement of cash flows
Quick books calls the income statement what?
Profit and loss statement
