会计学-财务会计.1.pptVIP

SUMMARY Types of Transactions Affecting Owner’s Equity Learning Objective Describe the financial statements of a proprietorship and explain how they interrelate. 5 Financial Statements After transactions have been recorded and summarized, reports are prepared for users. The accounting reports providing this information are called financial statements. FINANCIAL STATEMENTS Income Statement The income statement reports the revenues and expenses for a period of time, based on the matching concept. The matching concept is applied by “matching” the expenses incurred during a period with the revenue that those expenses generated. The excess of the revenue over the expenses is called net income, net profit, or earnings. If expenses exceed revenue, the excess is a net loss. Statement of Owner’s Equity The statement of owner’s equity reports the changes in the owner’s equity for a period of time. It is prepared after the income statement because the net income or net loss for the period must be reported in this statement. Financial Statements – Income Statement Net income is carried to the statement of owner’s equity. From the income statement To the balance sheet Financial Statements – Statement of Owner’s Equity (continued) Balance Sheet A balance sheet is a list of the assets, liabilities, and owner’s equity as of a specific date. Account Form The account form of a balance sheet lists the assets on the left and the liabilities and owner’s equity on the right. It resembles the basic format of the accounting equation. This amount is compared to the net cash flow on the statement of cash flows. From the statement of owner’s equity Financial Statements – Balance Sheet (continued) Statement of Cash Flows A statement of cash flows is a summary of the cash receipts and cash payments for a specific period of time. It consists of three sections: (1) operating activities(2) investing activities(3) financing activities This amount should match Cash on the balance sheet Fin