Introduction to Financial Statements: Understanding Income

School: Azusa Pacific University - Course: ACCT 512 - Subject: Accounting

Chapter 1: Introduction to Financial Statements Income statement Revenues Service revenue Expenses Salaries and wages expense Rent expense Supplies expense Depreciation expense Interest expense Insurance expense Total expenses Net income Retained earnings Retained earnings, October 1 $ Add: Net Income$ Less: Dividends$ Retained earnings, October 31 $ Balance Sheet Assets Cash Accounts receivable Supplies Prepaid rent Equipment, net Total assets Liabilities and Stockholder's Equity Liabilities Notes payable Accounts payable Unearned service revenue Salaries and wages payable Interest payable Total liabilities Stockholders equity Common stock Retained earnings Total stockholders equity Total liabilities and stock holders equity Balance sheet Assets= liabilities+stockholders' equity Ending balance in retained earnings is needed in preparing the balance sheet

Statement of Cash Flows Cash froms fromoperatingactivities Cash receipts from operating activities Cash payments from operating activities Net cash provided by operating activities Cash flows frominvestingactivities Purchase of equipment Net cash used by investing activities Cash flows fromfinancingactivities Issuance of common stock Issuance of notes payable Payment of dividends Net cash provided by financing activities Net increase in cash Cash at beginning of period Cash at end of period On statement of cash flow, cash at end of period goes on Balance Sheet as Cash