(a) Name of owner As with the profit and loss statement, a balance sheet must show the name of the owner and, where applicable, the…

Assets are subdivided into current and long-term assets to reflect the ease of liquidating each asset. Cash, for obvious reasons, is considered the most liquid…

This comprises the following amounts owed by the business to outside parties: (a) Current liabilities—these include all liabilities which are due and payable within 12…

Sometimes this is referred to as stockholders’ equity. Owners’ equity is made up of the initial investment in the business as well as any retained…

Example CompanyBalance SheetDecember 31, 2005 The notes to the sample balance sheet have been omitted.

Because the income statement is prepared under the accrual basis of accounting, the revenues reported may not have been collected. Similarly, the expenses reported on…

The official name for the cash flow statement is the statement of cash flows. The statement of cash flows is one of the main financial…

When an asset (other than cash) increases, the Cash account decreases. When an asset (other than cash) decreases, the Cash account increases. When a liability…

Cash involving operating activities This section of the cash flow statement reports the company’s net income and then converts it from the accrual basis to…

This section of the cash flow statement reports changes in the balances of long-term asset accounts, such as: Long-term Investments Land Buildings Equipment Furniture &…