Date post: | 21-Mar-2017 |
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Business Organisations Financial Statements
Section 2 Objective 4
Business Organisations Financial Statements
Business organisations Financial Statements
• Section 2• Objective 4
– Identify the main financial statements prepared by various organisations
Business organisations Financial Statements
Business organisations Financial Statements
• Financial Statements are prepared from business transactions.
• The main financial statements are:– Income Statement (formerly known as Trading and
Profit and Loss account)– Income and Expenditure account– Balance Sheet– Cash Flow Statement
Business organisations Financial Statements
Business organisations Financial Statements• Financial Statements: – Income Statement (Trading and Profit and Loss account)• Is used to determine whether a firm makes profit or loss for a
particular period• Firms which use this financial statement are
– Sole proprietor– Partnerships– Corporations
Business organisations Financial Statements
Business organisations Financial Statements• Financial Statements:– Income and Expenditure account• Is used to determine whether a firm makes a surplus or a
deficit for a particular period– Firms which use this financial statement are• Cooperatives• Non-Profit organisations
Business organisations Financial Statements
Business organisations Financial Statement• Financial Statement:– Balance Sheet• Shows the worth of the organisation at a particular period of
time• It is presented to show the firm assets, liabilities and capital
• Firms which use this financial statement are• Sole traders• Partnerships• Corporations• Cooperatives • Non-Profit organisations
Business organisations Financial Statements
Business organisations Financial Statements
• Financial Statement:– Cash Flow Statement:• Identifies a firm’s cash inflows (receipts) and cash outflows
(payments)over a period of time• Shows an organisation movement (changes) in cash for a
period of time• Determines also, the liquidity of a company
– Companies may use this statement based on its accounting policy