This document/notes make you easy to understand lessons like, how to reconcile bank and cash in bank, contains formulas you need when doing a financial statement. Also this document contains images about financial problems with solutions for you to review and comprehend.
Time gap in recording transactions is one of the causes of differences in cash book and bank statement.
Answer: TRUE
2.
Non-sufficient fund refers to cheques deposited that is honored by the bank.
Answer: FALSE
3.
Financial statement shows the transaction not recorded either by cash book or passbook.
Answer: FALSE
4.
Cheques outstanding is the cash receipts recorded by depositor but not included in bank statement.
Answer: FALSE
5.
Bank statement is written by bank but remains in the depositor\'s possession.
Answer: TRUE
6.
Cheques issued by the firm that have not yet presented to its bank for payment is deposit outstanding.
Answer: FALSE
Content preview
FINANCIAL STATEMENT AND ANALYSIS
FINANCIAL STATEMENT
Financial Statements is a formal record of the Financial Activities and Position of a Business,
Person, or Other Entity. Usually prepared by a Company's Management,
Investors, Lenders, Employees, Tax Authorities and Government to present the Financial
Performance and position.
PROJECTED FINANCIAL STATEMENT
Projected Financial Statements are detailed descriptions of a Company’s Operations and
Prospects for the Upcoming Year.
Projected Financial Statements Includes:
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● Projected Income Statement
● Projected Balance Sheet
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● Projected Cash Flow Statement
INCOME STATEMENT
An Income Statement or Profit and Loss Account is one of the Financial Statements of a
Company and shows the Company’s Revenues and Expenses.
Helpful to know about Company’s Financial Condition.
PROJECTED INCOME STATEMENT
Income Statement is a Statement which is prepared to
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know Profit or Loss of the Business.
OBJECTIVES OF INCOME STATEMENT
● To Ascertain the Earning Capacity or Profitability
● To know the Solvency of an Organization
● To Ascertain the Financial Strength
● To know the Capacity of Payment of Interest and Dividend
● To know the Trend of an Organization
● To Provide useful information to the Management
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BALANCE SHEET
A Balance Sheet is a Financial Statement that
summarizes a Company's Assets, Liabilities and
Shareholders' Equity at a specific point in time.
Formula;
Assets = Liabilities + Shareholders' Equity
PROJECTED BALANCE SHEET
Balance Sheet is a Statement which is prepared to know
the value of Assets and Liabilities at the end of a Period.
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OBJECTIVES OF BALANCE SHEET
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● The Main Objective of Balance Sheet is to assess the Financial Position of the Firm.
It is the list of Assets and Liabilities of the Firm on a Specific Date.
● The Short Term and Long Term Financial Position of the Firm can be obtained from the
analysis of the Balance Sheet.
● Balance Sheet is rightly said to be a mirror reflecting the true value of Assets and
Liabilities on Particular Date.
CASH FLOW STATEMENT
Cash Flow Statement is a Financial Statement that shows how changes in Balance Sheet
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Accounts and Income affect Cash and Cash Equivalents, and breaks the analysis down to
Operating, Investing and Financing Activities.
The Cash Flow Statement organizes and reports the
cash generated and used in the following categories –
1. Operating
2. Investing
3. Financing
PROJECTED CASH FLOW STATEMENT
Projected Cash Flow Statement is a key aspect of
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Financial Management of a Business, Planning its
future cash requirements to avoid a crisis of Liquidity.
, OBJECTIVES OF CASH FLOW
STATEMENT
● Measure of Cash
● Generating Inflow of Cash
● Classification of Activities
● Prediction of Future
● Evaluation of Future Cash Flow
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HORIZONTAL ANALYSIS
Using comparative financial statements to calculate peso or percentage changes in a
financial statement item from one period to the next
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CALCULATING CHANGE IN PESO AMOUNT
Peso Change=Current Year-Base Year
Since we are measuring the amount of the change between 2019 and 2020, the peso
amounts for 2019 become the “base” year figures.
CALCULATING CHANGE AS A PERCENTAGE
Percentage change=Peso change/Based Year figure x 100%
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