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Module 7

This document discusses preparing and maintaining financial records and reports. It defines key terms like assets, receivables, capital, balance sheet, and income statement. It explains that accounting is the recording and reporting of financial transactions, while bookkeeping is the act of recording these transactions chronologically. It also outlines the preparation of key financial statements, including the balance sheet which shows assets, liabilities, and equity, and the income statement which summarizes revenue, expenses, and net profit/loss. Specific balance sheet accounts like cash, receivables, inventory, and capital are also defined.

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Gil Bryan Balot
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104 views17 pages

Module 7

This document discusses preparing and maintaining financial records and reports. It defines key terms like assets, receivables, capital, balance sheet, and income statement. It explains that accounting is the recording and reporting of financial transactions, while bookkeeping is the act of recording these transactions chronologically. It also outlines the preparation of key financial statements, including the balance sheet which shows assets, liabilities, and equity, and the income statement which summarizes revenue, expenses, and net profit/loss. Specific balance sheet accounts like cash, receivables, inventory, and capital are also defined.

Uploaded by

Gil Bryan Balot
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Preparing and Maintaining Financial

Records and Reports


WORDS TO STUDY
Assets are things of value owned by the business
Receivables are summarized accounts maintained with
debtors and creditors.
Capital is an excess of assets over liabilities
Balance Sheet is the formal statement of the financial
position of the business that shows the assets, liabilities and
owner’s equity.
Income statement is a report that summarizes the revenue
items, expense and the difference between, which is called
net profit/loss for the period.
ACCOUNTING
-The language of business
-The art of recording, classifying, summarizing
in a significant manner and in terms of money,
those transactions and events which are part, at
least of a financial character and interpreted as
the results thereof.
BOOKKEEPING
The act of recording business and events in
systematic and chronological manner. The
person involved in this task is the
bookkeeper. His main job is to record and
process data in the accounting system
PREPARATION OF FINANCIAL STATEMENTS

FINANCIAL STATEMENTS
 
Balance Sheet
Income Statement
Statement of Cash Receipt and
Disbursement
BALANCE SHEET
It is a formal statement of the financial
position of the business that shows the assets,
liabilities and owner’s equity. It contains too
main sections:
Assets
Liabilities
INCOME STATEMENT
 
It is a report that summarizes the revenue,
items, expense and the difference between
is called net profit/loss for the period.
BALANCE SHEET ACCOUNTS
Cash reported in the balance shows in your cash book,
with the total cash on hand and the bank deposits

Receivables or payables – are summarized from the


accounts maintained with debtors and creditors.

Merchandise and supplies inventory – are determined by


having physical count.
Capital is simply the excess of assets over
liabilities
Assets – are things of value owned by a
business
Assets are normally classified as current,
fixed and other assets.

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