DO NOT SEND/EDIT Cathleen Angelica L.

Rubio

Profit and Loss account Cost of Sales

 Whereas the balance sheet shows a Cost of Sales are expenses that can be
directly attributed to sales items, such as
snapshot at a point in time of the net worth
purchases of stocks.
of the business, the profit and loss account
shows the current financial year’s net
Expenses
operating profits, broken down into various These are all other expenses (other than
sales, cost of sales and expenses ledger purchases of assets) which cannot be
attributed directly to sales items, such as rent,
electricity or advertising.
Sales
Sales accounts show all sales made in the period, regardless
of whether or not money has been received yet, and are
shown as a credit in the Profit and Loss accounts. Where
money has not yet been received, the debit is not to cash (as FINANCIAL STATEMENTS
per the CD example above), but to a Debtors account (money Financial statements are general
owed from customer account). purpose, external financial statements
prepared according to generally
Balance Sheet: reports the amounts of assets, liabilities, and accepted accounting principles. Some
stockholders’ equity at a specified moment, such as midnight terms that apply to the financial
of December 31; also known as the statement of financial statements include:
position.
 Statement Of Cash Flows:
reports the changes in cash and
Income Statement: reports revenues, expenses, gains, cash equivalents during a period
losses, and net income during the period of time stated in its of time according to three
heading; also known as the statement of operations and as activities: operating, investing,
the profit and loss (P&L) statement. and financing.

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

 Audited Financial Statements:
 Statement Of Stockholders’ Equity: reports the independent CPA firm gives
changes in the components of stockholders’ equity, assurance about reasonableness
including net income, other comprehensive income, and compliance with accounting
dividends, exercise of stock options. principles.

 Interim Financial Statements: issued between the  Financial Reporting: includes

annual financial statements, e.g. quarterly financial statements, annual and
quarterly reports to SEC and
stockholders, press releases and
other financial reports.