Financial Puzzle FINANCIAL STATEMENTS By PresenterMedia.com PresenterMedia.com

Financial Puzzle FINANCIAL STATEMENTS By PresenterMedia.com PresenterMedia.com

STATEMENT OF CASH FLOWS - Indicates cash inflows and outflows from operating, investing, and financing activities for a period of time (Cash basis). How are Financial Statements prepared? INCOME STATEMENT - Indicates revenues less expenses = net income for a period of time STATEMENT OF RETAINED EARNINGS - Indicates changes in Owner’s Equity for a period of time BALANCE SHEET - Indicates the ending balances of assets, liabilities, and owners’ equity at a point in time

Examples of accounts: Revenues: Sales, Fees Expenses: Cost of Goods Sold, Salaries, Rent, Utilities, Depreciation, Interest Income Statement - Indicates revenues less expenses = net income for a period of time

Beginning Balance: (if any) Add: Net income or Subtract : Net loss Add: Owner Contributions Less: Dividends = Ending Balance Statement of Retained Earnings - Indicates changes in Owner’s Equity for a period of time

3 Categories: Operating Investing Financing Statement of Cash flows Indicates cash inflows and outflows from operating, investing, and financing activities for a period of time (Cash basis).

Operating – Cash in and out from operating activities Cash received from customers Cash paid to employees Cash paid to suppliers Cash paid for rent Cash paid for utilities Statement of Cash flows Indicates cash inflows and outflows from operating, investing, and financing activities for a period of time (Cash basis).

INVESTING ACTIVITIES. Purchase and sale of long- term assets Examples: Cash paid for Car Cash paid for Computer Cash received for Car Cash received for Computer Obtaining cash or other resources to pay for investments in long term assets. Examples: Cash received from borrowing a loan Cash paid to payoff loan Cash paid to owners (shareholders) dividends Cash received from owners (investing in the business) FINANCING ACTIVITIES Statement of Cash flows Indicates cash inflows and outflows from operating, investing, and financing activities for a period of time (Cash basis).

Assets = Liabilities + Owner’s Equity Assets: Cash, Accounts Receivable, Supplies, Prepaid Assets (Insurance), Inventory, Car, Accumulated Depreciation – Car Liabilities: Accounts Payable, Interest Payable, Utilities Payable, Notes Payable Owner’s Equity: Capital, Withdrawals/Drawing Indicates the ending balances of assets, liabilities, and owners’ equity at a point in time Balance Sheet YOU OWE YOU HAVE YOU OWN