Income Statement And Balance Sheet Preparation

How to prepare a balance sheet.

Income statement and balance sheet preparation. These topics will show you the connection between financial statements and offer a sample balance sheet and income statement for small business. Income statement for the year ended 31 december 2015. The following trial balance is prepared after preparation of income statement for f. Income statement balance sheet preparation use the appropriate items from the following list to prepare in good form owen davis company s income statement and balance sheet at dec 31 2003 item value rm 000 at december 31 2003 accounts payable 220 accounts receivable 450 accruals 55 accumulated depreciation 265 buildings 225 cash 215.

Green as at 31 march 2015. In financial accounting the balance sheet and income statement are the two most important types of financial statements others being cash flow statement and the statement of retained earnings. Balance sheet as at 31 december 2015. In other words your company s balance sheet shows you your current assets current liabilities and owner s equity or shareholders equity if you re a corporation.

Preparing a balance sheet is similar to preparing an income. Green as at 31 march 2015 in both horizontal and vertical style. The balance sheet shows a company s total value while the income statement shows whether a company is generating a profit or a loss. The income statement also called a profit and loss statement is one of the major financial statements issued by businesses along with the balance sheet and cash flow statement.

Income statements show how much profit a business generated during a specific reporting period and the amount of expenses incurred while earning revenue. Prepare an income statement for the year ending 31 december 2015 and a balance sheet at that date in as much detail as possible. In the absence of information about the date of repayment of a liability then it may be assumed. You may also assume that there are 360 days in a year.

The balance sheet and the income statement are two of the three major financial statements that small businesses prepare to report on their financial performance along with the cash flow statement. Preparation of balance sheet horizontal and vertical style. A balance sheet lists assets and liabilities of the organization as of a specific moment in time i e. As of a certain date.