Bookkeeping and Accounting All-in-One For Dummies, UK Edition

Chapter 1

Getting a Financial Report Ready for Prime Time

In This Chapter

Making sure that all the pieces fit together

Looking at the various changes in owners’ equity

Making sure that disclosure is adequate

Touching up the numbers

Financial reporting on the Internet

Dealing with financial reports’ information overload

The primary financial statements of a business are:

• Profit and Loss statement: Summarises sales revenue inflows and expense outflows for the period and ends with the bottom-line profit, which is the net inflow for the period (a loss is a net outflow).
• Balance Sheet: Summarises the financial condition at the end of the period, consisting of amounts for assets, liabilities and owners’ equity at that instant in time.
• Cash flow statement: Summarises the net cash inflow (or outflow) from profit for the period plus the other sources and uses of cash during the period.