Introduction to Financial Accounting
Types of Financial Statements
Measures finances of a company at a given point in time and is based on the equation that Assets = Liabilities + Equity
This statement shows the revenue and expenses of a company over a period of time.
Statement of Equity
This statement shows how the stockholder equity changes over a period of time.
Statement of Cash Flows
This statement shows the net cash flows due to the following activities:
- operating expenses
- financing activities
Money owed by customers for goods or services received.
Outstanding loans (only the principle of the loans) owed to the company.
Money incoming to a firm is considered revenue if:
- it is earned (there are some goods or services that are provided to the customers) AND
- it is realized (there is cash received or there is something received that can be easily be converted to a known amount of cash)