For personal use by the original purchaser only. Copyright © 2010 AccountingCoach.com.
Quick View of Basic Accounting
is a quick reference and overview of accounting concepts. You
should consult a professional accountant and/or the accounting profession’s official pronouncements for
specific situations and for more complete information.
Financial statements are general purpose, external financial statements prepared according to generally
accepted accounting principles. Some terms that apply to the financial statements include:
reports the amounts of assets, liabilities, and stockholders’ equity at a specified
moment, such as midnight of December 31; also known as the statement of financial position.
reports revenues, expenses, gains, losses, and net income during the period of time
stated in its heading; also known as the statement of operations and as the profit and loss (P&L)
statement of cash flows
reports the changes in cash and cash equivalents during a period of time
according to three activities: operating, investing, and financing.
statement of stockholders’ equity
reports the changes in the components of stockholders’ equity,
including net income, other comprehensive income, dividends, exercise of stock options.
interim financial statements
issued between the annual financial statements, e.g. quarterly
audited financial statements
independent CPA firm gives assurance about reasonableness and
compliance with accounting principles.
includes financial statements, annual and quarterly reports to SEC and
stockholders, press releases and other financial reports.
The balance sheet or statement of financial position reports assets, liabilities, owner’s or stockholders’
equity at a point in time. Some terms that apply to balance sheets include:
resources, things owned, and prepaid or deferred expenses; examples include cash,
receivable, inventory, prepaid insurance, land, equipment, vehicles, furnishings.
obligations and deferred revenues; examples include accounts payable, loans payable, wages
payable, interest payable, customer deposits, deferred revenues.
a sole proprietorship’s assets minus its liabilities.