Preparation of the Financial Statements Flashcards
this will help determine the business financial position at a specific point in time and over a period of time
Financial statements
The information from the accounting journal and the general ledger is used in preparation of your business financial statements, these are?
Income statement
statement of retained earnings
balance sheet
statement of cash flows
is almost uniquely important because it shows the overall profitability of your company for the time period in question
Income Statement
Also called a profit and loss statement
Income statement
this is the bottom line of the income statement
Net income or profit
it is either retained by the firm for growth or paid out as dividends to the firm’s owners and investors, depending on the company’s dividend policy
Net income
Net profit or loss must be calculated before the statement of retained earnings can be prepared
Statement of Retained Earnings
It is the second financial statement to be prepared in the accounting cycle
Statement of Retained Earnings
This statement shows distribution of profits that are retained by the company and which re distributed as dividends
Statement of Retained Earnings
is the financial statement that illustrate the firm’s financial position at a given point in time – the last day of accounting cycle
Statement of Financial Position
In Statement of Financial position, ___ are what the business owns
Assets
In Statement of Financial position, ___ are what the business owes
Liabilities and Equity
This statement compares two time periods of financial data and shows how cash has changed in the revenue, expenses, asset, liability and equity accounts during these time periods.
Statement of Cash Flow
this financial statement must be prepared last because it takes information from all three previously prepared financial statements
Statement of Cash Flow
shows and records the revenue when it was earned
Accrual Basis