Transcript Financial Records

Financial Records & Statements
Ch. 12-2 PoB 2011
Financial Records
 Financial Records – are used to record and analyze the
financial performance are maintained
Types of Records
 Assets Records – identify the buildings and equipment owned
by the business, their original and current value, and the
amount owed if money was borrowed to purchase the assets
 Depreciation Records – identify the amount assets have
decreased in value due to their age and use
 Inventory Records - identify the type and quantity of resources
and products on hand along with the current value of each
Types of Records
 Records of Accounts – identify all purchases and sales made
using credit
 Cash Records – list all cash received and spent by the business
 Payroll Records – contain information on all employees of the
company, their compensation, and benefits
 Tax Records – show all taxes collected, owed and paid
Financial Statements
 The three most important elements of a company’s financial
strength are:
 Assets – what a company owns
 Liabilities - what a company owes
 Owner’s Equity – is the value of the owner’s investment in the
business
 Financial Statement – report that sums up the financial
performance of a business
 Balance Sheet – reports a company’s assets, liabilities and
owner’s equity
Balance Sheet
Income Statement
 Three other key financial elements for a business are the
amount of:
 Sales
 Expenses
 Profits
 All are reported on the company’s Income Statement
Income Statement
Profit and Loss Statement
 Shows the total sales and revenue over a period of
time, normally quarterly, to determine if their was a
profit or loss in sales
Review
1. How has the process of maintaining financial records
been affected by technology?
2. What is the difference between a balance sheet and
an income statement?