The torleaing trial balance kas ben draen uptrom a boclkrhop Trial balance as at 31 DOC 2028 Cr Dr Sch 161,500 8 Sales Purchases salaries and uwages Office expenses Invuranco Elecricity stediorery Advertising Telophone Rodes Discount allouad Discaunt received Rent received Roturn inwards Return autwardy stock ay at 1Jan 2001 PremiNes tock as ad 31 boc 200l Fixtures and fitiings DobTors ard qoditors Carh in Hard carh in Bank 103, 5000| 18,700°00 25.00 00 1100.00 C0.00 24 00 00 3,500.00 800.00 3000 00 100.00 200.00 3000 00 1500 00 3,500 00 46,00 00 89 000 00 46, 000 00 4,800 00 R00 00 7,500 00 12,000 00 11, 000.00 (apital 14,000.00 Dra wings stock as at 3I DOC 2001 41,000:00 328,700.00 326,1000 Propare Incomo sialement for yoar ended 3 1 DOC A022 ard statement of financal pasinion
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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