Prepared by LOU V. FOJA, CPA Director Financial Management Services, Romblon State University
Financial Statements
Financial Statements
Financial Statements
Financial Statements
Financial Statements
Order of Preparation
Income Statement
Net income
Ending Balance Retained Surplus
Source documents
Trial balance
Financial Statements
Adjusting Entries
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Income Statement
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Income Statement
The first statement prepared is the Income Statement. The Income Statement reports an organizations performance for the period.
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Income Statement
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Income Statement
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Income Statement
Revenues represent collections of fees from students and receipt of grants/donations. Note that revenues should be recorded whether the fees have been received or not.
Note:
When fees are uncollected, these are recorded as receivables, but these are deemed to be revenues for the period.
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Income Statement
Expenses are incurred when an organization receives goods and services. Like revenues, payment may or may not have been made.
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Income Statement
Expenses are incurred when a organization receives goods and services. Like revenues, payment may or may not have been made.
Examples of expenses include honoraria, wages, office supplies expense, transportation expenses, repairs and maintenance, grants-in-aid, office equipment, buildings and structures.
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Income Statement
Your organizations income statement must categorize your expenses (for easy understanding) as follows:
Income Statement
Personal Services expenses paid for services rendered, e.g. honoraria, wages Operating Expenses expenses paid for the daily operation of the organization, e.g. office supplies, water expenses, telephone expenses, repairs and maintenance, transportation expenses Capital Outlay major expenditures involving large amount of capital, e.g. construction of buildings and other structures, furniture & fixtures, appliances.
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Balance Sheet
The purpose of the balance sheet is to report the financial position of an organization at a particular point in time.
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Balance Sheet
The purpose of the balance sheet is to report the financial position of an organization at a particular point in time.
The basic format for the balance sheet is: Assets = Liabilities + Equity
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Balance Sheet
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Balance Sheet
Examples include cash, accounts receivable, unused office supplies, buildings and office equipment.
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Balance Sheet
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Balance Sheet
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Balance Sheet
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Balance Sheet
There are two different types of assets shown on a balance sheet. These are current assets and non-current assets.
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Balance Sheet
There are two different types of assets shown on a balance sheet. These are current assets and non-current assets.
Current assets + Non-current assets Total assets
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Balance Sheet
Current assets are assets that will be used or turned into cash within one year.
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Balance Sheet
Current assets are assets that will be used or turned into cash within one year.
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Balance Sheet
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Balance Sheet
These include accounts such as: buildings and structures, office equipment , furniture and fixtures.
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Balance Sheet
There are two different types of liabilities shown on a balance sheet current liabilities and long-term liabilities.
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Balance Sheet
There are two different types of liabilities shown on a balance sheet current liabilities and long-term liabilities.
Current liabilities + Long-term liabilities Total liabilities
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Balance Sheet
Current liabilities are obligations that will be paid in cash (or other services) or satisfied by providing service within the coming year.
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Balance Sheet
Current liabilities are obligations that will be paid in cash (or other services) or satisfied by providing service within the coming year.
Examples include accounts payable, short-term notes payable, and wages payable.
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Balance Sheet
Long-term liabilities are obligations that will not be paid or satisfied within the year.
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Balance Sheet
Long-term liabilities are obligations that will not be paid or satisfied within the year.
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Balance Sheet
Equity is divided into two categories: contributed capital-beginning balance and retained surplus (income).
Contributed capital -Beginning + Retained surplus Total Equity
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Balance Sheet
Contributed capital is the amount of cash and other assets at the end of the previous year (this is now the beginning balance for the current year).
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Balance Sheet
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Balance Sheet
The Balance Sheet must be prepared after the Income Statement in order for the determination of the income (loss) and to calculate the ending balance of the Retained Surplus.
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Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities
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The Full-Fledged Statement of Cash Flows: Operating Activities Operating activities are those activities that enter into the determination of net income.
1. Transactions affecting current assets 3. Changes in noncurrent balance sheet accounts that directly affect net income
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Name of Organization Statement of Cash Flows Year Ended December 31, 2011
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FINANCIAL PLANNING
Beginning Balance P xxxx Expected Collections .. xxxx Total Revenues .. P xxxx Estimated Expenditures . xxxx Balance .. P xxxx
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The End
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