Which financial statement is prepared as of a specific date

Indirect expenses form a second category and show all costs indirectly associated with the revenue-generating activities of a firm. These costs can include salaries, general and administrative expenses, research and development, and depreciation and amortization.

Together these indirect expenses are subtracted from gross profit to identify operating income. The final category on the income statement factors in capital expenses. The last expenses to be considered here include interest, tax, and extraordinary items. The subtraction of these items results in the bottom line net income or the total amount of earnings a company has achieved. Net income is also carried over to the cash flow statement where it serves as the top line item for operating activities.

Therefore, key ratios used for analyzing the income statement include gross margin, operating margin, and net margin as well as tax ratio efficiency and interest coverage. It reports all cash inflows and outflows over the course of an accounting period with a summation of the total cash available. Standard cash flow statements will be broken into three parts: operating, investing, and financing.

This financial statement highlights the net increase and decrease in total cash in each of these three areas. The operating portion shows cash received from making sales as part of the company's operations during that period.

It also shows the operating cash outflows that were spent to make those sales. For example, the cash paid for rent, salaries, and administration. The other two portions of the cash flow statement, investing and financing, are closely tied with the capital planning for the firm which is interconnected with the liabilities and equity on the balance sheet.

Investing cash activities primarily focus on assets and show asset purchases and gains from invested assets. The financing cash activities focus on capital structure financing, showing proceeds from debt and stock issuance as well as cash payments for obligations such as interest and dividends.

The income statement provides deep insight into the core operating activities that generate earnings for the firm. The balance sheet and cash flow statement, however, focus more on the capital management of the firm in terms of both assets and structure. Overall, top-performing companies will achieve high marks in operating efficiency, asset management, and capital structuring. Management is responsible for overseeing these three levers in a way that serves the best interest of the shareholders, and the interconnected reporting of these levers is what makes financial statement reporting so important.

Financial Statements. Tools for Fundamental Analysis. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. A balance sheet is like a photograph; it captures the financial position of a company at a particular point in time. The other two statements are for a period of time. The balance sheet is the same equation in an easier to read format.

The statement of cash flows shows the cash inflows and cash outflows from operating, investing, and financing activities. Operating activities generally include the cash effects of transactions and other events that enter into the determination of net income. We will examine the statement of cash flows in more detail later but for now understand it is a required financial statement and is prepared last. The statement of cash flows uses information from all previous financial statements. You should be able to update the Financial Statements column of our chart of accounts spreadsheet need another copy, click Chart of Accounts.

Privacy Policy. Skip to main content. Unit 2: Accounting Principles and Practices. Search for:. Financial Statements Financial statements are how companies communicate their story. The income statement contains: Revenues are the inflows of cash resulting from the sale of products or the rendering of services to customers.

We measure revenues by the prices agreed on in the exchanges in which a business delivers goods or renders services. Expenses are the costs incurred to produce revenues.

The calculation for the total expenses ratio is equal to total fund cost divided by total fund assets. Information needed to prepare an income statement comes from the Trial Balance columns and the Income Statement columns of a work sheet.

The income statement for a service business has five sections: heading, revenue, expenses, net income or loss, and capital. The adjusting entry to allocate the cost of equipment to operations includes a debit to Accumulated Depreciation - Equipment and a credit to Depreciation Expense - Equipment.

The financial statement that reports the final balances in all asset, liability, and owner's equity accounts at the end of the accounting period. One source of information for completing the balance sheet. This is completed as a supporting document for the balance sheet. Which financial statement reports information as of a specific date? Category: personal finance financial planning. A balance sheet often states that it is prepared as of a specific date, referred to as the balance sheet date.

The balance sheet reports on a company's financial conditions, namely the values of the company's assets, liabilities and shareholders' equity. What are the 4 financial statement? What is the most important financial statement?

How do we find retained earnings? Which financial statement is prepared first? What are the required financial statements? Statement of income. Which financial statements are required by GAAP? What are the 5 types of financial statements? Which statements are used in accounts?