Financial Statements

Financial statements are very important concept in accounting. There are five types of financial statement; Statement of Comprehensive Income, Statement of Capital, Statement of Financial Position, Statement of Cash Flow, and Notes to Financial Statement.

I only knew the first four types. Statement of Comprehensive Income is only for revenue less expenses. It can be written in single-step or multiple-step. Statement of Capital has beginning capital, adding net income/loss and additional investment, less withdrawal and finally having an ending capital. Statement of Financial Position has total assets equals to total liabilities and capital. It can be on account or report form. You also need to classify which are current assets and liabilities from non-current assets and liabilities. In Statement of Cash Flows, there are the cash from operating, investing and financial activities. Cash from operating activities can be show in direct or indirect method. I’m telling you, it’s somehow long and you need to listen to your professor if you do not want to miserably study it with yourself.

There will always be a three-line header on top of these financial statements; company name for first line, type of financial statement on the second line and date for the third line. Take note, there are differences in writing the date. Don’t forget the double rule, peso signs and the proper arrangements and alignments of accounts and amounts. (Click here for more information)