Sales (all on credit) $500,000 Cost of Goods Sold 380,000 Gross Profit 120,000 Operating Expenses Selling Expenses 35,000 Administrative Expenses 45,000 Total Operating Expenses 80,000…

A balance sheet is a snapshot of a business’ financial condition at a specific moment in time, usually at the close of an accounting period….

(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…