OUTPUT FROM ACCOUNTING

Output from Accounting

Balance sheet

INCOME STATEMENT

CASH FLOWS STATEMENT

also known as Statement of Profit and Loss

Also known as statement of financial position

ENTERPRISE REPORT

STATEMENT OF OWNER'S EQUITY

INCOME TAX REPORT

GENERAL LEDGER

TRANSACTION JOURNAL

DEPRECIATION SCHEDULE

BALANCE SHEET a.k.a statement of financial position

KEY TAKEAWAYS

• A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity.
• The balance sheet is one of the three (income statement and statement of cash flows being the other two) core financial statements used to evaluate a business.
• The balance sheet is a snapshot, representing the state of a company's finances (what it owns and owes) as of the date of publication.
• Fundamental analysts use balance sheets, in conjunction with other financial statements, to calculate financial ratios.

INCOME STATEMENT@STATEMENT OF PROFIT AND LOSS

KEY TAKEAWAYS

• An income statement is one of the three (along with balance sheet and statement of cash flows) major financial statements that reports a company's financial performance over a specific accounting period.
• Net Income = (Total Revenue + Gains) – (Total Expenses + Losses)
• Total revenue is the sum of both operating and non-operating revenues while total expenses include those incurred by primary and secondary activities.
• Revenues are not receipts. Revenue is earned and reported on the income statement. Receipts (cash received or paid out) are not.
• An income statement provides valuable insights into a company’s operations, the efficiency of its management, under-performing sectors and its performance relative to industry peers.

CASH FLOWS STATEMENT

KEY TAKEAWAYS

• A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.
• The cash flow statement measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses.
• The main components of the cash flow statement are cash from operating activities, cash from investing activities, and cash from financing activities.
• The two methods of calculating cash flow are the direct method and the indirect method.

Cash and cash equivalents generally consist of the following:

• Cash in hand
• Cash at bank
• Short term investments that are highly liquid
• Bank overdrafts comprise an integral element of the organization’s treasury management

STATEMENT OF OWNER'S EQUITY

Quick Summary:

• Equity, in the simplest terms, is the money held by a company’s shareholders that is invested in the business. It is the amount of money that represents ownership of a business.
• An equity statement is a financial statement that a company is required to prepare along with other important financial documents at the end of the financial year.
• The statement of owner’s equity reports the changes in company equity. The changes include the earned profits, dividends, inflow of equity, withdrawal of equity, net loss, and so on.

KEY TAKEAWAYS

• Business income is earned income and encompasses any income realized from an entity’s operations.
• For tax purposes, business income is ordinary income.
• Business expenses and losses often offset business income.
• How a business is taxed depends on whether it is a sole proprietorship, partnership, or corporation.

INCOME TAX REPORT

ENTERPRISE REPORT

Enterprise reporting is a process of extracting, processing, organizing, analyzing, displaying and reporting data in the companies. It uses enterprise reporting tools to organize data into charts, tables, widgets, or other visualizations. It may offer a range of interactivity, so users can find business problems and make data-driven decisions via the reports. The core steps are generating reports based on the business data, distributing reports, and managing the reports. In the first step, the reports are usually made by the enterprise reporting tool. The enterprise reporting tool helps set manual reports as report templates to realize the automation of the business report. Then the reporting engine publishes these reports to the reporting portal to allow non-technical end-users access. In this way, users can gain insights from the data and make data-driven decisions. The enterprise reporting portal also helps organize and manage reports according to business topics to facilitate users to find reports easily.

DEPRECIATION SCHEDULE

It calculates an asset’s depreciation expenses based on the date of purchase, initial cost, useful life (how long a company intends to use it), and tracks beginning and ending accumulated depreciation, or the value of the assets when it is replaced. For accounting purposes, depreciation schedules typically include the following information:

• Description of asset
• Date of purchase
• Cost
• Expected life
• Method of depreciation
• Salvage value
• Current year depreciation
• Cumulative depreciation
• Netbook value = Cost – Cumulative Depreciation

WHY IS A DEPRECIATION SCHEDULE IMPORTANT?

• Businesses use it to report asset use to their stakeholders. Deprecation also brings down the historical value of assets. Stakeholders can review this information and know when to expect replacement assets purchased by a company. For example, a company with design equipment or hardware will often replace these items at some time during operations or during the life of the business. When accumulated depreciation nears the asset’s historical cost, a replacement purchase may be coming up soon.

TRANSACTION JOURNAL

What is a journal entry in Accounting? Journal entry is an entry to the journal. Journal is a record that keeps accounting transactions in chronological order, i.e. as they occur. Ledger is a record that keeps accounting transactions by accounts. Account is a unit to record and summarize accounting transactions. All accounting transactions are recorded through journal entries that show account names, amounts, and whether those accounts are recorded in debit or credit side of accounts.

The accounting equation, which underlies double-entry accounting, is as follows:

• Assets=Liabilities+Stockholders’ Equity (Balance Sheet)
• Revenue−Expenses=Net Income (NI) or Net Profit (Income Statement)

Double-Entry Recording of Accounting Transactions To record transactions, accounting system uses double-entry accounting. Double-entry implies that transactions are always recorded using two sides, debit and credit. Debit refers to the left-hand side and credit refers to the right-hand side of the journal entry or account. The sum of debit side amounts should equal to the sum of credit side amounts. A journal entry is called "balanced" when the sum of debit side amounts equals to the sum of credit side amounts.

GENERAL LEDGER

KEY TAKEAWAYS

• The general ledger is the foundation of a company's double-entry accounting system.
• General ledger accounts encompass all the transaction data needed to produce the income statement, balance sheet, and other financial reports.
• General ledger transactions are a summary of transactions made as journal entries to sub-ledger accounts.
• The trial balance is a report that lists every general ledger account and its balance, making adjustments easier to check and errors easier to locate.

A general ledger represents the record-keeping system for a company's financial data with debit and credit account records validated by a trial balance. The general ledger provides a record of each financial transaction that takes place during the life of an operating company.