FINANCIAL STATEMENT

FINANCIAL ACCOUNTING/PM AMLA ABU

THE COURSE CONTENT

FINANCIAL STATEMENTS
Financial Statement Analysis

TriaL Balance The Recording Process

Source Documents

Appreciate Bookkeeping? Accounting?

How? you need to understand why you are doing what you're doing with

those numbers ie. accounting information /data) what knowledge your results will give you ie. available from the financial statements

FINANCIAL STATEMENTS
A wide variety, with the most common ones

being a balance sheet and an income statement Each take a different view on what is essentially the same information.

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 losing money) over that time interval by comparing income/revenues and expenses/costs for a given time period.
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INCOME STATEMENT
The performance of the business:

GROSS PROFIT / LOSS NET PROFIT / LOSS

2 SECTIONS: (1) All revenues and

expenses pertaining to the buying and selling of goods; (2) Other revenues and expenses
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BALANCE SHEET
Also called a statement of financial

position, why?
Looks at the bigger picture of the

business by giving a comparison between all assets and liabilities of the business

FINANCIAL ACCOUNTING/PM AMLA ABU

BALANCE SHEET
It tells you how much money would you

have (or how much would you owe) if the business is closed and everything is sold off today.
To ascertain the financial position of

the business (Assets, liabilities and the resulting owners equity).

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INCOME STATEMENT-Summary
RM

SALES
Less: COST OF GOODS SOLD GROSS PROFIT Add: OTHER REVENUES Less: EXPENSES NET PROFIT
FINANCIAL ACCOUNTING/PM AMLA ABU

56,000
26,000 30,000 2,000 12,000 20,000
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BALANCE SHEET: Summary

NON-CURRENT ASSETS CURRENT ASSETS RM 200,000 25,000 125,000 70,000 40,000 15,000 125,000

OWNERS EQUITY NON-CURRENT LIABILITIES CURRENT LIABILITIES

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INCOME STATEMENT- COGS

RM

COST OF GOODS SOLD

Opening Stock Add: Purchases Less: Closing Stock 3,000 30,000 33,000 7,000 26,000
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INCOME STATEMENT-Other Revenues

RM Dividend received Discount received Commission income Rental income 500 200 300 1,000 2,000
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INCOME STATEMENT-Expenses
RM Salaries Discount allowed Utilities Advertising 9,500 300 1,300 900 12,000
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BALANCE SHEET: Noncurrent assets

Freehold building Van

RM (Book value) 140,000 60,000 200,000

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BALANCE SHEET: Current assets

Closing stock Debtors Cash at bank Cash in hand Prepaid advertising RM 7,000 5,600 9,000 3,000 400 25,000
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FINANCIAL ACCOUNTING/PM AMLA ABU

BALANCE SHEET: Owners Equity

Capital (opening) Add: Net Profit Less: Drawings RM 55,000 20,000 5,000 70,000

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BALANCE SHEET: Noncurrent liabilities

8% Loan from CIMB RM 40,000

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BALANCE SHEET: Current liabilities

Rental received in advance Accrued utilities Creditors RM 700 300 14,000 15,000

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