Introduction to Accounting Preparing for a User’s Perspective

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Presentation transcript:

Introduction to Accounting Preparing for a User’s Perspective What are the general-purpose financial statements and what are their standard equations? Debits and Credits Trainer By Kevin C. Kimball, CPA with support from www.canvas.net Free Jan. 2014 Available on the Google Play Store

Statement of Cash Flows General-Purpose Financial Statements Names Equations Balance Sheet Assets = Liabilities + Equity Statement of Shareholder Equity Beg. Equity + Adds – Subs = End. Equity Income Statement Revenues – Expenses = Net Income Statement of Cash Flows Op. Cash Flows + Invest Cash Flows + Finance Cash Flows + Beg. Cash = End. Cash Footnote disclosures

Statement of Cash Flows What are the names of the four general-purpose financial statements? Names Balance Sheet SEC Edgar Statement of Shareholder Equity Income Statement Statement of Cash Flows Public Companies Prepare Have audited Submit Footnote disclosures

How resource position was financed 1) Balance Sheet Statement of Financial Position Resources = Claims Assets = Liabilities + Equity Resource position How resource position was financed =

2) Statement of Shareholder Equity Assets = Liabilities + Equity Beginning Shareholder Equity + Additions to Shareholder Equity - Subtractions from Shareholder Equity = Ending Shareholder Equity

2) Statement of Shareholder Equity Statement of Stockholder Equity FASB ASC Section 215-10-05 Stock = Shares Stock = Inventory

2) Statement of Shareholder Equity Assets = Liabilities + Equity Beginning Shareholder Equity + Capital Contributions + Additions to Shareholder Equity + Net Income (Internally generated capital) - Subtractions from Shareholder Equity - Capital Distributions - Dividends = Ending Shareholder Equity

2) Statement of Shareholder Equity ABC Co Statement of Retained Earnings For the year ended 12/31/X3 Equity Beginning Retained Earnings + Net Income or – Net Loss Capital Contributions Retained Earnings - Dividends = Ending Retained Earnings

3) Income Statement ABC Co Income Statement Statement of Comprehensive Income Statement of Operations ABC Co Income Statement For the year ended 12/31/X3 P&L Account Revenues - Expenses = Net Income

4) Statement of Cash Flows Begin. Cash + or - Cash Flows = End. Cash ABC Company Statement of Cash Flows For the year ended 12/31/X3 1/1/X3 12/31/X3 Cash inflows Operating activities Investing activities Financing activities = Change in cash Cash balance + Beginning cash = Ending cash Cash outflows

Statement of Cash Flows General-Purpose Financial Statements Names Equations Balance Sheet Assets = Liabilities + Equity Statement of Shareholder Equity Beg. Equity + Adds – Subs = End. Equity Income Statement Revenues – Expenses = Net Income Statement of Cash Flows Op. Cash Flows + Invest Cash Flows + Finance Cash Flows + Beg. Cash = End. Cash Footnote disclosures

Introduction to Accounting Preparing for a User’s Perspective What are the general-purpose financial statements and what are their standard equations? Debits and Credits Trainer By Kevin C. Kimball, CPA with support from www.canvas.net Free Jan. 2014 Available on the Google Play Store