World Wide CPA

22/09/2014

HTA Advisory Pty Ltd

08/10/2013

"Financial Statements Generated by a Business"
A business generates four financial statements at the end of its accounting period:-
i) Income statement: shows operational results of business during/over the accounting period.
ii) Statement of owners’ equity: showing changes in owner’s equity through profit/additional investment or through losses/drawl by owner.
iii) Balance sheet showing financial position at the end of the accounting period i.e. a picture of what the business owns and what it owes.
iv) Statement of cash flows giving a picture of cash inflows (receipts) and cash outflows (payments) over/during the accounting period. It is prepared from the two major financial statements viz Income Statement and Balance Sheet.

08/10/2013

07/10/2013

Debit and Credit:
• Debit and Credit are two Latin words and as such it is difficult to say what do these mean.
• But we can develop an understanding as to what does these terms stand for.

DEBIT:
• It signifies the receiving of benefit. In simple words it is the left hand side.

CREDIT:
• It signifies the providing of a benefit. In simple words it is the right hand side.