martes, 26 de febrero de 2013

Financial Statement

-         Financial Statements provide information about a company.
-         It is done at the end of a fiscal year, twelve consecutive months.
-         All business organizations must produce financial statements for tax-purposes.

Balance sheet

-         The balance sheet shows the financial position of a business on a particular date.
-         It shows the company’s assets, liabilities and net worth.


-         Assets are items of value owned by a business.
o       Current assets are cash or anything that can quickly be turned into cash within a year.
o       Accounts receivable is money for which a company has billed its costumers but has not yet been paid.


-         Liabilities are debts owed by a business.
o       Accounts payable is the money that the business owes to other business that supply it with services.
o       Current liabilities must be paid within a year.
o       Long-term liabilities debt that does not have to be paid within a year.

Net Worth (Owner’s Equity)

-         Net worth is the value of the business to the owner.
-         The amount left over after liabilities have been subtracted from assets.
Assets – Liabilities = Net Worth
Liabilities + Net Worth = Assets

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