PRESENTATION OF FINANCIAL STATEMENTS

Financial statements are formal records of financial activities and position of a business, individual, or other entity. They communicate financial results and performance to various stakeholders.

KEY TOPICS UNDER UNIT III:

• Preparation of Final Accounts

• Profit and Loss Account

• Balance Sheet

• Cash Flow Statement

• Excel Application for Financial Statements

• Case Studies and Workshops

THREE MAIN FINANCIAL STATEMENTS:

• Income Statement (Profit & Loss Account): Shows profitability over a period

• Balance Sheet: Shows financial position at a specific point in time

• Cash Flow Statement: Shows cash inflows and outflows during a period

PROFIT AND LOSS ACCOUNT:

Also called Income Statement, it summarizes revenues, costs, and expenses to show the net profit or loss. Format includes operating income, operating expenses, non-operating items, and final profit/loss.

BALANCE SHEET:

Shows Assets, Liabilities, and Equity. Assets = Liabilities + Equity. Provides a snapshot of financial position at year-end.

CASH FLOW STATEMENT:

Reconciles beginning and ending cash balances by showing cash flows from Operating Activities, Investing Activities, and Financing Activities.

FINAL ACCOUNTS PREPARATION:

Involves adjusting entries, preparing trial balances, and creating financial statements. Ensures all transactions are properly recorded and reported.