How are Income statements, retained earnings statements, balance sheets and statements of cash flows connected
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Income statements contains information about your revenue and your expenses. When you reduce your revenue with your expenses, you'll get profit or loss. \n\nBalance sheets contains information about your assets, liabilities and capital. Your profits or loss value from the income statement will be incorporated in your capital calculation and make your capital either increasing (profit) or decreasing (loss).\n\nRetained earnings statement is generally used for accounting in corporations, where the owner is more than one. Because the owner is more than one, your income statement value has to be divided for each owner at the last month of your accounting period. To make it not confused with your current income statement which will keep changing at time to time, your income statement value at the last month of the period is transferred to the retained earnings statement.\n\nThe statement of cash flows will calculate the difference between your cash in and cash out. The difference will be considered as the amount of your available cash right now (either in your bank or in your pocket). It will be included in your balance sheets calculation as assets.
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Look at the balance sheet
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Accounting information such as a companies set of accounts is useful to the shareholder and prospective shareholder.\n\nThey can use the info to make informed decisions on whether to invest in the company or not.\n\nThere will also be information from auditors of companies. They will state whethet they feel the accounts are true and fair.
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Model balance sheet and profit and loss appropriation account can be found in Schedules to the Companies Act 1956. This is an Indian Law. In USA you may refer to website of CPA institute for any such format. Otherwise best way is to go to any company's website and look under information for investors. Financial results for companies are usually displayed on their websites. You can get formats there.
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It dosen't represent cash flow, so a cash flow statement must be made. You account for thengs you might not get. example you sell stuff on account, in accural you put it into a recievables accout, with increases your equity, however there is a chance you don't collect because they dan't pay. \n\nI am not sure which is the Primary but those are dissadvantages.
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A Balance Sheet is a snapshot of a company's financial position at a given point in time. The basic Balance Sheet equation is ASSETS = LIABILITIES. Broadly, the Assets are properties and other things of value which the company owns and claims against others; the Liabilities are the financial obligations of the company. In law, the company is a separate legal entity. Thus, for instance if A owns 100% of the shares of a company (a limited liability company), since the company is legally, a totally separate entity from A, A's shareholdings in the company, is a financial obligation of the company and is thus a liability of the company. So for the company (i.e. on the books of the company), the OWNER'S EQUITY is a liability to the company. On the books it is represented as a separate entity.  Thus, the balance sheet equation is written: ASSETS = LIABILITIES + OWNER'S EQUITY, i.e. A = L + OE.\n\nNow, OE has two elements, (i) CAPITAL --- essentially the funds which the shareholders inject into the company and (ii)RETAINED EARNINGS ----- these are funds which are retained in the company in lieu of being paid to the shareholders as dividends. The RE plus the dividends would be, at the end of an acounting period, the company earnings for that accounting period.  RE are cumulative, time period to time period. Of course, the company earnings are, in fact, a financial obligation of the company in favor of the shareholders. So if they are not paid to the shareholders at the end of the accounting period, i.e. if they are retained in the company, they are a liability to the company. So we get: A = L + OE becomes A = L + C + RE.  This is the basic balance sheet equation.\n\nNow, as said, the RE come from the EARNINGS (the INCOME). Basically, the INCOME is the difference between the REVENUES and EXPENSES. That is, INCOME = REVENUES - EXPENSES. This is, essentially, the Income Statement equation. Now, assuming no dividends paid, then RETAINED EARNINGS = REVENUES - EXPENSES.  Thus A = L + C + RE, where, NOTE, RE means retained earnings,  becomes:\n\n       A = L + C + R - E  i.e.\n\nAssets = Liabilities + Capital + Revenues - Expenses.\n\nNow this can be written, to make all signs in the equation positive:  A + E = L + C + R.  This is the combined Balance Sheet and Income Statement equation.  This equation shows the 5 basic types of accounts in Accounting. It also highlights something else. Expenses are handled, in the Ledger, as are Assets.  Capital and Revenue items are handled as are Liabilities.  "Handled" here refers to how the Dual Entry System of Accounting works. The basic concept which applies here is that for each transaction in which a company is involved, the total value of the DEBITS must equal the total value of the CREDITS. Now, in accounting, a DEBIT is nothing more than a left hand entry in a "T" account in the Ledger.  A CREDIT is nothing more than a right hand entry. That's it. No more, no less.\nNow, an increase in an asset is a debit, so dec. in asset is a credit, and a dec. in liability is a debit and an inc. in a liability is a credit.  So one merely has to remember one of these, e.g. an increase in an asset is a debit.\n\nNow, recall, expenses are handled as assets. So an increase in an expense is a debit.  Also capital accounts and revenues are handled as liabilities. So, an increase in a capital account or a revenue is a credit.\n\nThese are the principles employed to balance the books. The balanced books provide the numbers that are transferred to the Balance Sheet to the various Asset (Short term and Lond term Assets), Liability (Short term and Long term) and Capital items.  The asset items are normally set up on the left hand side of the bal. sht. and the liability and capital items on the right hand side, with liability items laid out above capital items.  For short and long term assets and liabilities, the short term items are laid out above the long term items. Any basic acco
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Dr. Discount (given)\nDr. Cash \nCr. Sale \n\nThis is the journal entry for recording the transaction... it gives the accounts affected..\n\nKnow the fundamental concepts of accounting here...\n\nhttp://www.futureaccountant.com/accounting-process/study-notes/\n\nhttp://www.futureaccountant.com\nhttp://www.schoolingkids.com
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http://en.wikipedia.org/wiki/Income_statement\n\nIncome statements for companies indicate how Net Revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into Net Income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). The purpose of the income statement is to show managers and investors whether or not the company made or lost money during the period being reported.
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the balance sheet. it contains all the transactions in one, up-to-date place.
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Cash flow is a more pure reading of exactly how the business is doing.  EPS can have a lot of other factors that are variable from quarter to quarter, such as one time charges or different tax rates.
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Assets on the left.\n\nLibabilities and Equity on the right.\n\nIt would be impossible to list all possible entries under each as there are virtually an unlimited number of each ...\n\nBalance sheet items are more like categories (cash, equipment, loans, etc.) ... not transactions.
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It is basically all the accounting that goes into the figures for financial accounting, or the numbers that are reported on an annual report. This includes keeping track of cost of goods sold and all intracompany purchases and sales, that would normally not show up on a financial report, but is necessary to show departmental progress for the executives.
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Depreciation is added into every cash flow statement that I have ever seen where a company has fixed depreciable assets. Since it reduces net income but does not currently rely on the use of cash, you add it back. The purchase of the asset would be handled seperately as a use of cash. If you have a depreciation expense you should have an accumulated depreciation amount on your balance sheet. That sounds like your problem.\n\nEquipment $10,000.00\naccum depr. 1,000.00\nnet asset $ 9,000.00\n\nIf your first years depreciation was $1,000.00 then that would be on the income statement as an expense and on the cash flow as an add back to cash flow. You would also have an equipment purchase of $10,000.00 reducing your cash flow.
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Normally the change in cash on the balance sheet equals the change in cash on the Cash Flow Statement..  I have seen this before when they arent equal.  Usually there is some kind of adjustment or restatement to the financial statements when it happens.  This article may help.
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Perhaps they mean the ledgers or the account books that you actually use to keep a running total of income and expenditure... If so, you need to describe how and why they are used and include some example pages from account books themselves.... Check with tutor or teacher just to make sure.
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The accountant is charged with providing timely, accurate information to management and shareholders in order to facilitate decisions to better the performance of the entity.\n\nFrom Payroll, Accounts Payable, Accounts Receivable and General ledger maintenance.  \n\nInformation from these are used to create financial statements such as Income statements, Balance sheets and Cash flows.
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Balance Sheet is the statement that shows the financial position of the Company.It shows the assets and liabilities of the company.Its usually prepared at the end of the accounting period.