Presentation on theme: "GAAP PowerPoint #4. A formal record of the financial activities of a business Includes four basic financial statements: ◦ Balance Sheet (Statement."— Presentation transcript:
A formal record of the financial activities of a business Includes four basic financial statements: ◦ Balance Sheet (Statement of Financial Position) ◦ Income Statement (Statement of Comprehensive Income) ◦ Statement of Cash Flows ◦ Statement of Changes in Equity
Reports a company’s financial position/condition at a given point in time Reports on: ◦ Assets ◦ Liabilities and ◦ Equity Details about cash in bank, amounts owed to creditors, and value of company’s assets.
Reports on a company’s income and expenses over a given period of time Reports on ◦ Revenue (income) ◦ Expenses Shows a company’s profit or loss over a given period of time
Reports on a company’s cash flow activities into and out of the business from: ◦ Operating Activities ◦ Investing Activities and ◦ Financing Activities Shows how changes in the balance sheet and income statement affect cash and cash equivalents
Reports the changes in the company’s equity throughout the reporting period Reports ◦ profit or loss from the company, ◦ dividends paid, and ◦ other items that are debited/credited to retained earnings
Explain the purpose of the Balance Sheet. Explain the purpose of the Income Statement. Explain the purpose of the Statement of Equity. Explain the purpose of the Statement of Cash Flows.