Financial Statements during an accounting period the business will record and

Financial statements during an accounting period the

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Financial Statements: during an accounting period the business will record and classify its transactions and then report the financial data in the form of financial statements. 1. Income Statement: summarizes revenues and expenses for a specific accounting and illustrates whether the business has earned a profit or incurred a loss. Measures the operating performance of a business. a. Expense: properties, materials, supplies, and services acquired by the business that have been used in the operation of the business as a means ot generate revenue. b. Net Income (Profit)= Revenue>Expenses c. Net Loss=Expenses>Revenue 2. Balance Sheet: a graphic representation of the accounting equation, in statement form, presenting the financial position of the business at a specific point in time. It shows the types and amounts of assets owned by the business and the degree of risk taken by both the owner and the creditors. 3. Statement of Cash Flows: shows how a company’s operating, investing, and financing activities have affected cash during an accounting period. 4. Statement of Stockholders’ Equity: summarizes the changes in the components of the stockholders’ equity section of the balance sheet.
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