business organisations financial statements

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Business Organisations Financial Statements Section 2 Objective 4

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Page 1: Business organisations financial statements

Business Organisations Financial Statements

Section 2 Objective 4

Page 2: Business organisations financial statements

Business Organisations Financial Statements

Page 3: Business organisations financial statements

Business organisations Financial Statements

• Section 2• Objective 4

– Identify the main financial statements prepared by various organisations

Page 4: Business organisations financial statements

Business organisations Financial Statements

Page 5: Business organisations financial statements

Business organisations Financial Statements

• Financial Statements are prepared from business transactions.

• The main financial statements are:– Income Statement (formerly known as Trading and

Profit and Loss account)– Income and Expenditure account– Balance Sheet– Cash Flow Statement

Page 6: Business organisations financial statements

Business organisations Financial Statements

Page 7: Business organisations financial statements

Business organisations Financial Statements• Financial Statements: – Income Statement (Trading and Profit and Loss account)• Is used to determine whether a firm makes profit or loss for a

particular period• Firms which use this financial statement are

– Sole proprietor– Partnerships– Corporations

Page 8: Business organisations financial statements

Business organisations Financial Statements

Page 9: Business organisations financial statements

Business organisations Financial Statements• Financial Statements:– Income and Expenditure account• Is used to determine whether a firm makes a surplus or a

deficit for a particular period– Firms which use this financial statement are• Cooperatives• Non-Profit organisations

Page 10: Business organisations financial statements

Business organisations Financial Statements

Page 11: Business organisations financial statements

Business organisations Financial Statement• Financial Statement:– Balance Sheet• Shows the worth of the organisation at a particular period of

time• It is presented to show the firm assets, liabilities and capital

• Firms which use this financial statement are• Sole traders• Partnerships• Corporations• Cooperatives • Non-Profit organisations

Page 12: Business organisations financial statements

Business organisations Financial Statements

Page 13: Business organisations financial statements

Business organisations Financial Statements

• Financial Statement:– Cash Flow Statement:• Identifies a firm’s cash inflows (receipts) and cash outflows

(payments)over a period of time• Shows an organisation movement (changes) in cash for a

period of time• Determines also, the liquidity of a company

– Companies may use this statement based on its accounting policy