Cheat Sheet

FINANCIAL STATEMENTS

Financial statements are general purpose, external financial statements prepared according to

generally accepted accounting principles. Some terms that apply to the financial statements

include:

balance sheet reports the amounts of assets, liabilities, and stockholders’ equity at a

specified moment, such as midnight of December 31; also known as the statement of financial

position.

income statement reports revenues, expenses, gains, losses, and net income during the

period of time stated in its heading; also known as the statement of operations and as the profit

and loss (P&L) statement.

statement of cash flows reports the changes in cash and cash equivalents during a period

of time according to three activities: operating, investing, and financing.

statement of stockholders’ equity reports the changes in the components of

stockholders’ equity, including net income, other comprehensive income, dividends, exercise

of stock options.

interim financial statements issued between the annual financial statements, e.g.

quarterly

audited financial statements independent CPA firm gives assurance about

reasonableness and compliance with accounting principles.

financial reporting includes financial statements, annual and quarterly reports to SEC and

stockholders, press releases and other financial reports.

BALANCE SHEET

The balance sheet or statement of financial position reports assets, liabilities, owner’s or

stockholders’ equity at a point in time. Some terms that apply to balance sheets include:

assets resources, things owned, and prepaid or deferred expenses; examples include cash,

accounts receivable, inventory, prepaid insurance, land, equipment, vehicles, furnishings

liabilities obligations and deferred revenues; examples include accounts payable, loans

payable, wages payable, interest payable, customer deposits, deferred revenues....