MBA DEVINDAR
FINANCIAL STATEMENTS.
Key points of financial Statements :-
ЁЯСЙ Financial statements are prepared from the trial balance.
ЁЯСЙ Revenue nature are transferred (shown) either to debit side of trading account or two P&L a/c.
ЁЯСЙ capital nature entries are transferred to debit side of balance sheet.
DEFINITION OF FINANCIAL STATEMENTS
* F.S. are detailed information about the financial performance and financial position of a firm.
TYPES OF FINANCIAL STATEMENTS
1) Trading and P&L A/c ( incomes Statement)
2) Balance Sheet (Position Statement)
OBJECTIVE/ NEED/IMPORTANCE OF F.S:::---
#Importance of trading and P&L a/c---------
1) to determine gross profit or gross loss
2) to determine net profit or net loss
3) details of expenses and income
4) reserves
5) accounting Ratios
IMPORTANCE OF BALANCE SHEET
1) shows the Assets and liabilities
2) shows the financial position
3) comparison with previous year
4) determine solvent position
CAPITAL EXPENDITURE:-
Capital expenditures (CapEx) are funds used by a company to acquire, upgrade and maintain physical assets for new project or investment purpose.
Capital expenditure is added to the cost of a fixed asset and shown in the balance Sheet.
REVENUE EXPENDITURE :-
Revenue expenditure is short-term business expenses usually used immediately in one year within accounting period.
Ex.
1) expenses incurred in day to day business operation like that salary, wages, power, fuel etc.
2) expenses incurred for repairs and maintenance of fixed assets.
3) expenses incurred on purchase of stock.
4) depreciation on fixed assets
