7/31/2019 Income Generation-Financial Statement

1/18

FINANCIAL

STATEMENT

FINANCIAL ACCOUNTING/PM AMLA ABU 1

7/31/2019 Income Generation-Financial Statement

2/18

THE COURSE CONTENT

Source Documents

The Recording

Process

TriaL Balance

FINANCIALSTATEMENTS

FinancialStatement

Analysis

7/31/2019 Income Generation-Financial Statement

3/18

Appreciate Bookkeeping?

Accounting?

How? you need to understand

why you are doing what you're doing with thosenumbers ie. accounting information /data)

what knowledge your results will give you ie.available from thefinancial statements

7/31/2019 Income Generation-Financial Statement

4/18

FINANCIAL

STATEMENTS

A wide variety, with the most common ones

being a balance sheet and an incomestatement

Each take a different view on what is

essentially the same information.

7/31/2019 Income Generation-Financial Statement

5/18

INCOME

STATEMENT

Also called a profit and loss statement,

why?

It gives a picture of the business making

profit or loss (or making money or losingmoney) over that time interval bycomparing income/revenues and

expenses/costs for a given time period.FINANCIAL ACCOUNTING/PM AMLA ABU 5

7/31/2019 Income Generation-Financial Statement

6/18

INCOME

STATEMENT The performance of the business:

GROSS PROFIT / LOSS

NET PROFIT / LOSS

2 SECTIONS: (1) All revenues andexpenses pertaining to the buying and

selling of goods; (2) Other revenues andexpenses

FINANCIAL ACCOUNTING/PM AMLA ABU 6

7/31/2019 Income Generation-Financial Statement

7/18

BALANCE SHEETAlso called a statement of financial

position, why?

Looks at the bigger picture of thebusiness by giving a comparison betweenall assets and liabilities of the business

FINANCIAL ACCOUNTING/PM AMLA ABU 7

7/31/2019 Income Generation-Financial Statement

8/18

BALANCE SHEET It tells you how much money would you

have (or how much would you owe) if

the business is closed and everything issold off today.

To ascertain the financial position ofthe business (Assets, liabilities and theresulting owners equity).

FINANCIAL ACCOUNTING/PM AMLA ABU 8

7/31/2019 Income Generation-Financial Statement

9/18

INCOME

STATEMENT-Summary

FINANCIAL ACCOUNTING/PM AMLA ABU 9

RM

SALES 56,000

Less: COST OF GOODS SOLD 26,000

GROSS PROFIT 30,000

Add: OTHER REVENUES 2,000

Less: EXPENSES 12,000

NET PROFIT 20,000

7/31/2019 Income Generation-Financial Statement

10/18

BALANCE SHEET:

Summary

FINANCIAL ACCOUNTING/PM AMLA ABU 10

RM

NON-CURRENT ASSETS 200,000

CURRENT ASSETS 25,000

125,000

OWNERS EQUITY 70,000NON-CURRENT LIABILITIES 40,000

CURRENT LIABILITIES 15,000

125,000

7/31/2019 Income Generation-Financial Statement

11/18

INCOME

STATEMENT- COGS

FINANCIAL ACCOUNTING/PM AMLA ABU 11

RM

COST OF GOODS SOLD

Opening Stock 3,000

Add: Purchases 30,000

33,000

Less: Closing Stock 7,000

26,000

7/31/2019 Income Generation-Financial Statement

12/18

INCOME

STATEMENT-OtherRevenues

FINANCIAL ACCOUNTING/PM AMLA ABU 12

RM

Dividend received 500

Discount received 200

Commission income 300

Rental income 1,000

2,000

7/31/2019 Income Generation-Financial Statement

13/18

INCOMESTATEMENT-Expenses

FINANCIAL ACCOUNTING/PM AMLA ABU 13

RM

Salaries 9,500

Discount allowed 300

Utilities 1,300

Advertising 900

12,000

7/31/2019 Income Generation-Financial Statement

14/18

BALANCE SHEET: Non-

current assets

FINANCIAL ACCOUNTING/PM AMLA ABU 14

RM(Book value)

Freehold building 140,000

Van 60,000

200,000

7/31/2019 Income Generation-Financial Statement

15/18

BALANCE SHEET:

Current assets

FINANCIAL ACCOUNTING/PM AMLA ABU 15

RM

Closing stock 7,000

Debtors 5,600

Cash at bank 9,000

Cash in hand 3,000

Prepaid advertising 400

25,000

7/31/2019 Income Generation-Financial Statement

16/18

BALANCE SHEET:

Owners Equity

FINANCIAL ACCOUNTING/PM AMLA ABU 16

RM

Capital (opening) 55,000

Add: Net Profit 20,000

Less: Drawings 5,000

70,000

7/31/2019 Income Generation-Financial Statement

17/18

BALANCE SHEET: Non-

current liabilities

FINANCIAL ACCOUNTING/PM AMLA ABU 17

RM

8% Loan from CIMB 40,000

7/31/2019 Income Generation-Financial Statement

18/18

BALANCE SHEET:

Current liabilities

FINANCIAL ACCOUNTING/PM AMLA ABU 18

RM

Rental received in advance 700

Accrued utilities 300

Creditors 14,000

15,000