ACCOUNTING EXPERTISE

ALL ABOUT ACCOUNTING : 46th BLOG           💎 ACCOUNTING💎 ★ Accounting exercise and practices :   Lesson : 5 [Part : 1] Hi friends  🙏 Today's discuss Relationship between Financial Statements.                               So let's discuss .... * RELATIONSHIP BETWEEN FINANCIAL STATEMENTS : The financial statements are comprised of the income statement, balance sheet, and statement of cash flows. These three statements are interrelated in several ways, as noted in the following points: THE INCOME STATEMENT : The net income figure in the income statement is added to the retained earnings line item in the balance sheet, which alters the amount of equity listed on the balance sheet. The income statement is a financial report that shows an entity's financial results over a specific period of time. The time period covered is usually for a month, quarter, or year, though it is possible that partial periods may also be used. This is the most commonly-used of the financial stateme

ALL ABOUT ACCOUNTING : 45th BLOG           💎 ACCOUNTING💎 ★ Accounting exercise and practices :   Lesson : 4 [Part : 6] Hi friends  🙏 Today's discuss remaining part of summarizing changes in financial position                               So let's discuss .... ★  SUMMARIZING CHANGES IN FINANCIAL POSITION :   Once the trial balance is completed (and balanced), adjustments are made to record transactions that have not previously been recorded, such as bank charges, depreciation, loan loss provision, etc. For example, after an adequate loan loss reserve has been determined (discuss in Finance module)  an entry must be made to record a loan loss provision. This is done periodically,  either monthly or annually. The same occurs with a depreciation charge.  When a capital asset is purchased, the entire cost does not immediately go on the income statement as an expense. It is depreciated over time so that each year, an amount equal to the portion of it's useful life is expensed