Account Golden Nursery School Trial Balance 1/31/2011 Cash Accounts Receivable Equipment Buses Notes Payable Accounts Payable T. Kuo, Capital Requirements Dr Balance 2,070 1,700 1,040 17,400 22,210 Cr L.Trial Balance il.Income Statement. 15,000 1,640 5,570 22,210 1.Prepare Journal Entries II.Prepare T accounts. Ill.Generate ending balances in T accounts IV.Prepare February Transactions Date Description Paid this month's rent, Received fees for this month's services Purchases supplies on account Re-imbursed bus driver for gas Ordered playground equipment Made a payment on account 2-Feb 3-Feb 4-Feb 5-Feb 6-Feb 8-Feb 9-Feb 10-Feb 11-Feb 13-Feb 17-Feb 19-Feb 22-Feb 26-Feb Paid part-time assistants for services 27-Feb Purchased gas and oil for bus on account 28-Feb Made a cash withdraw! Received payments from customer on account Billed customers who had not yet paid for this month's services Paid for supplies purchased on 2/2 Purchased and received playground equipment ordered on 2/6 for cash Purchsed equipment on account Paid this month's utility bill Received payment for the month's services from customers previously billed Amount 400 650 85 40 1,000 170 1,200 700 1,000 290 145 500 460 325 200
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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