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10.02.2023 Basic Accounting Part 3

A trial balance is a worksheet that lists all debit and credit transactions for a company over a period of time to ensure the accounting records are mathematically correct. While debits and credits balancing shows no math errors, mistakes could still exist. Financial statements are written records that convey a company's financial performance and activities. Common types include the balance sheet, income statement, statement of cash flows, and statement of changes in equity. These statements are often audited to ensure accuracy for tax, financing, or investing purposes.

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23 views

10.02.2023 Basic Accounting Part 3

A trial balance is a worksheet that lists all debit and credit transactions for a company over a period of time to ensure the accounting records are mathematically correct. While debits and credits balancing shows no math errors, mistakes could still exist. Financial statements are written records that convey a company's financial performance and activities. Common types include the balance sheet, income statement, statement of cash flows, and statement of changes in equity. These statements are often audited to ensure accuracy for tax, financing, or investing purposes.

Uploaded by

Ellayza Operana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Basic

Accounting
Financial Statements
Proverbs 28:13

Whoever conceals their sins does not prosper, but the one who confesses and
renounces them finds mercy.
2nd King 22:7
“But they need not account for the money entrusted to them, because they
are honest in their dealings.”
The Trial Balance
(Kenton, 2020)

A trial balance is a worksheet with


two columns, one for debits and
one for credits, that ensures a
company’s bookkeeping is
mathematically correct.
The debits and credits include all
business transactions for a
company over a certain period,
including the sum of such accounts
as assets, expenses, liabilities, and
revenues.
Debits and credits of a trial balance
being equal ensure there are no
mathematical errors, but there
could still be mistakes or errors in
the accounting systems.
Financial statements are written records
What are that convey the business activities and the
financial performance of a company.
Financial Financial statements are often audited by
Statements? government agencies, accountants, firms,
(Murphy, 2020) etc. to ensure accuracy and for tax,
financing, or investing purposes.
Financial Statements
Balance Sheet (Statement of
Financial Position)

Income Statement (Statement


of Comprehensive Income)
Statement of Cash Flows
Statement of Changes in Equity
Balance Sheet (Statement of Financial Position)
provides an overview of assets, liabilities, and
stockholders' equity as a snapshot in time.
Income Statement (Statement of Comprehensive
Income)
primarily focuses on a company’s revenues and
Common
expenses during a particular period. Once
expenses are subtracted from revenues, the
statement produces a company's profit figure
Types of
called net income.
Cash Flow Statement (CFS)
Financial
measures how well a company generates cash
to pay its debt obligations, fund its operating Statements
expenses, and fund investments.
Statement of Changes in Equity
The statement of shareholders’ equity is a
financial statement that details changes in the
equity held by shareholders, whether those
shareholders be public or private investors.
(Stobierski, 2019)
Management’s Discussion and Analysis (MD&A)
The MD&A is a document written by the
company’s management, which is designed to
accompany financial reports.
Reading Activity: Financial Statements

Read the article, “FINANCIAL STATEMENT ANALYSIS: THE BASICS FOR


NON-ACCOUNTANTS”, from this link:
https://online.hbs.edu/blog/post/financial-statement-analysis
Answer a quiz about financial statements that will be posted in an
Assignment in MS Teams regarding the reading.

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