Which of the 4 basic financial statements have the following key elements operating activities financing activities and investing activities?
Statement of Cash Flow
Financial statements can be divided into four categories: balance sheets, income statements, cash flow statements, and equity statements.
There are four basic types of financial statements used to do this: income statements, balance sheets, statements of cash flow, and statements of owner equity.
Financing activities include debt issuance, equity issuance, stock repurchases, loans, dividends paid, and debt repayments.
The cash flow statement is typically broken into three sections: Operating activities. Investing activities. Financing activities.
The major elements of the financial statements (i.e., assets, liabilities, fund balance/net assets, revenues, expenditures, and expenses) are discussed below, including the proper accounting treatments and disclosure requirements.
The 10 elements are: (1) assets, (2) liabilities, (3) equity, (4) investments by owners, (5) distributions to owners, (6) revenues, (7) expenses, (8) gains, (9) losses, and (10) comprehensive income. The 10 elements of financial statements defined in SFAC 6 describe financial position and periodic performance.
The four financial statements (in order of preparation) are the income statement, statement of retained earnings (or statement of shareholders' equity), balance sheet, and statement of cash flows.
All four financial statements are linked. For example, net income is recorded at the bottom of the income statement (see below). It is also found on the cash flow statement and statement of retained earnings. After dividends are subtracted, we get retained earnings, which are stated on the balance sheet.
Overview: The balance sheet - also called the Statement of Financial Position - serves as a snapshot, providing the most comprehensive picture of an organization's financial situation. It reports on an organization's assets (what is owned) and liabilities (what is owed).
What are operating activities?
Operating activities are the daily activities of a company involved in producing and selling its product, generating revenues, as well as general administrative and maintenance activities. Key operating activities for a company include manufacturing, sales, advertising, and marketing activities.
Financing activities are transactions between a business and its lenders and owners to acquire or return resources. In other words, financing activities fund the company, repay lenders, and provide owners with a return on investment. Financing activities include: Issuing and repurchasing equity.
- Receipt of cash from sales.
- Collection of accounts receivable.
- Receipt or payment of interest.
- Payment for materials and supplies.
- Payment of salaries.
- Payment of principal and interest for operating leases. ...
- Payment of taxes, fines, and license costs.
Financing Activities
This section of your balance sheet looks at the changes in balances for long-term liabilities and stockholders' equity accounts. Essentially, it reports the issuance and/or repurchase of the company's stocks and bond as well as short and long-term borrowings and repayments.
Operating expenses are represented on a balance sheet as a liability. Because they are a financial expense that does not directly contribute to selling services or products, they aren't considered assets.
'Interest received and paid' is considered an Operating Activity while preparing Cash Flow Statement in case of a finance company. Was this answer helpful?
Balance Sheet Basics
This financial statement details your assets, liabilities and equity, as of a particular date. Although a balance sheet can coincide with any date, it is usually prepared at the end of a reporting period, such as a month, quarter or year.
It is possible to summarize the three elements which, as a whole, generate the balance sheet for a company as the following: Assets. Liabilities. Shareholders' Equity.
The operating profit (or operating income) can be found on the income statement or calculated as: Revenue - Cost of Goods Sold - Operating Expenses - Depreciation - Amortization.
The three elements of the accounting equation are assets, liabilities, and shareholders' equity. The formula is straightforward: A company's total assets are equal to its liabilities plus its shareholders' equity.
What four financial statements you will need to prepare when you complete the first period of your new company?
But if you're looking for investors for your business, or want to apply for credit, you'll find that four types of financial statements—the balance sheet, the income statement, the cash flow statement, and the statement of owner's equity—can be crucial in helping you meet your financing goals.
- Income Statement.
- Statement of Retained Earnings - also called Statement of Owners' Equity.
- The Balance Sheet.
- The Statement of Cash Flows.
Answer and Explanation:
Explanation: The balance sheet is not a basic element of financial statements. It is one of the financial statements that reports assets, liabilities and equity. Losses and revenue are elements of an income statement.
Net income from the bottom of the income statement links to the balance sheet and cash flow statement. On the balance sheet, it feeds into retained earnings and on the cash flow statement, it is the starting point for the cash from operations section.
The income statement, balance sheet, and cash flow all connect to create the three-statement model. How? Changes in current assets and liabilities on the balance sheet are reflected in the revenues and expenses that you see on the income statement.
