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Financial Statements

Financial Statements

   Statement of Financial Accounting Concepts (SFAC) No. 5
       "Recognition and Measurement in Financial Statements of Business Enterprises"
        Issued in December 1984.

Full set of financial statements

   A full set of financial statements for a period should show:

       Financial position at the end of the period
       Earnings (net income) for the period
       Comprehensive income (total nonowner changes in equity) for the period
       Cash flows during the period
       Investments by and distributions to owners during the period

Comprehensive Inome

   Comprehensive income
          --> includes all recognized changes in net assets
          --> except the investments by owners and distributions to owners.

Primary Financial Statements

   Balance Sheet
           --> Reports the financial position at the end of the period.

   Income Statement
           --> Reports the results of operations for the period.

   Statement of Cash Flows
           --> Reports cash inflows and outflows during the period.

   Statement of Stockholders' Equity
           --> Reports the changes in stockholders' equity during the period.

Components of Balance Sheet

   Assets
           --> Represents future economic benefits.

   Liabilities
           --> Represents future economic sacrifices.

   Stockholders' Equity
           --> Represents the residual portion of the assets after subtracting liabilities.
                                          (Stockholders' Equity = Assets - Liabilities)

   Accounting Equation

         Assets = Liabilities + Stockholders' Equity

    Examples of Asset Accounts
    Examples of Liability Accounts
    Examples of Stockholders' Equity Accounts

Components of Income Statement

   Revenues
   Expenses
   Net Income = Revenues - Expenses

    Examples of Revenue and Gain Accounts
    Examples of Expense and Loss Accounts

Components of the Statement of Cash Flows

   Cash Flows from Operating Activities
   Cash Flows from Investing Activities
   Cash Flows from Financing Activities

    Examples of Cash Flows from Operating Activities Section
    Examples of Cash Flows from Investing Activities Section
    Examples of Cash Flows from Financing Activities Section

Components of the Statement of Stockholders' Equity

   Common Stock
   Preferred Stock
   Additional Paid-in Capital (Paid-in capital in excess of par value)
   Retained Earnings

U.S. GAAP Codification

Accounting Topics

Inventory Valuation Methods

Depreciation Methods

Revenue Recognition Principle

Accrual Basis vs. Cash Basis Accounting

Basics of Journal Entries

Ratios for Financial Statement Analysis

Overview of Financial Statements