Financ Statements & Analyze Trans (1).docx - FINANCIAL STATEMENTS AND ANALYZING TRANSACTIONS Financial statements \u2013 the end product of financial

Financ Statements & Analyze Trans (1).docx - FINANCIAL...

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FINANCIAL STATEMENTS AND ANALYZING TRANSACTIONS Financial statements – the end product of financial accounting (annual report or 10-K) Income Statement – statement of earnings, statement of operations, P & L (profit & loss) o Revenues – increase to company’s resources for providing goods & services; company earns from customers o Expenses – decreases to a company’s resources from generating revenue o Gains – increase in resources, but caused by event that is not typical, recurring operating activity American Airlines reports revenue from sales, reports a gain if it sells an un- needed airplane for more than book value to another company o Show results of operations (profit or loss) for a period of time. o Revenue + Gains – (Expenses + Losses) = Net Income Statement of Retained earnings (or more comprehensive Statement of Shareholders’ Equity) o Show changes in equity for period of time o Contributed capital – consists of stock & related accounts. Represents amounts that owners invested into the business o Retained Earnings (Earned Capital) – profits the company has retained, that is, earnings that have not been distributed to owners in dividends o Retained Earnings (Beginning balance) + Net Income – Dividends = Ending balance in Equity Balance Sheet – statement of financial position/financial condition o Assets – resources that are expected to provide a future economic benefit. Things companies own or control Cash, Accounts Receivable, Inventories, Equipment, Buildings, investments, Patents, Goodwill, Resources, Land o Liabilities – obligations that will be satisfied in future. Debts of the firm. Accounts payable, Notes payable, Taxes Payable. (“payable” at the end is a liability) o Equity – owners’ claims to assets. Residual claim to the assets, the claim after liabilities have been satisfied o
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  • Fall '19
  • Balance Sheet, Generally Accepted Accounting Principles, Rex, Company’s Resources, rex carswell, Rex Carswell Automotive Company

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