The Balance Sheet contains the financial condition of a firm at a particular time. This includes the assets, liabilities, equity capital etc.
Assets = Liabilities + Equity Capital
Income statement contains all the income and expense related details of a company over a period of time. This includes all types of revenues, expenses, profit, loss and tax details.
Cash Flow Statement
The cash flow statement contains all the incoming and outgoing cash flows of the firm. The cash flows can be classified in three parts
Financial notes contains all the statement related details like
The other details related to financial reporting will be like
Double Entry Accounting
Double entry accounting refers to both side entry of a particular transaction so that both side of the balance sheet should match with each other. This can be done in the following ways
As per separate entity, the company and the company owners are considered to be separate entities. Based on that, all the financial statements are prepared.
Accounting system is maintained to automate the financial reporting process. The main parts of the accounting system are