Liabilities Steckholders'tquity Assets Common Stod Supples Salares Rent Auto ing Payable 2000 Cash Dividends Eamed Expense- Epense Espene - Expene *S0.000 S0.000 7000 Bal S0.000 7.000 7000 S0.000 -3,600 Bal 400 7.000 1400 S0,000 d 110.000 +110.000 Bal 156,400 7.000 1400 S0.000 110.000 -1.000 --33.000 Bal 123,400 7.000 00 S000 10.000 J1.000 -16,000 -31,000 - 16.000 -2000 400 Bal 10200 7000 1400 50.000 0.000 1.000 110.000 -55.000 -11.000 -55.000 7,000 -A500 2500 Bal 4700 1400 S0.000 -16,000 -4500 4500 Bal 400 1400 S0.000 110.000 -S5.000 -31.000 -16.000 4800 34500 AS00 Bal 34500 2.500 1400 50,000 -55,000 -31000 -16000 -4500 -4.800 4700 -15.000 144500 -15,000 Bal 1400 -I5.000 55.000 -4500 32600 34.500 2500 50,000 144500 -31.000 -16.000
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
A financial statements
Seth Feye established Reliance Financial Services on july 1, 2012. Reliance Financial Services offers financial planning advice to its clients. The effect of each transaction and the balance after each transaction for july follow:
Instructions
1.Prepare an income statement for lire month ended july 31, 2012
2. Prepare a statement of
3. Prepare a balance sheet as july 31, 2012
4. (optional) Prepare a statement of cash flows for the month ending july 31, 2012
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