中山大学会计基础Lesson09-en.pptVIP

Lesson 9Financial Statements Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Yat-sen University Outlines A General View of Financial statements Income statement Balance sheet Statement of owners’ equity A Simple Illustration Opening Story The questions are: Do they show you where a company’s money came from? Do they show you where it went, and where it is now. How accountants make all these ends satisfied? General View of Financial statements: GAAP Statement of Financial Position (Balance Sheet). Income Statement. Statement of Cash Flows. General View of Financial statements: Stock vs. Flow Stock/ resources and obligations at a point in time: Balance sheet. Flow/activity over a period of time: Income statement. Statement of cash flows. Financial Statement Objectives Useful for investment decisions. (All financial statements) Comprehensible. (All financial statements) About economic resources and claims on resources (Balance Sheet). About financial performance during a period (Income Statement). About cash flows (Statement of Cash Flows). General View of Financial statements: a Comparison General View of Financial statements: Brief Comments Information Disclosed on Financial Statements Information Disclosed on Financial Statements (cont) Income Statement Also called: Profit Loss statement = PL statement = statement of earnings = statement of operations Technically subordinate to BS. Shows detail of changes to RE. Many investors consider IS more important than BS. Variations in format. Parts of Income Statement Heading: Name of entity. Name of statement Time period covered. Revenues. Cost of Sales. Gross Margin. Expenses. Net Income Revenues inIncome Statement Several separate revenue items or net. Net sales = gross sales - sales returns and allowances - sales or cash discounts. Trade discounts not shown. Excludes sales or excise taxes collected for government. Other revenues (from activities not associated with sales of entity’s goods/services) may