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Ch. 15 Financial Statements for a Corporation

Financial statements provide the primary source of information needed by owners and managers to make decisions on the future activity of a business. Adequate Disclosure Concept Pg. 446 Compare financial condition and progress from one fiscal period to the next.

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Ch. 15 Financial Statements for a Corporation

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  1. Financial statements provide the primary source of information needed by owners and managers to make decisions on the future activity of a business. • Adequate Disclosure Concept Pg. 446 • Compare financial condition and progress from one fiscal period to the next. Ch. 15 Financial Statements for a Corporation

  2. Corporation’s Statements • Income Statement • Balance Sheet • Statement of Stockholder’s Equity

  3. For your reading pleasure… • Read about Ken Harrison on Page 447! 300 Madison Avenue 24th Floor New York, NY 10017 United States Founded in 1849 Phone: 646-471-4000 Fax: 646-471-4444 www.pwc.com

  4. Income Statement Stats • What is reported? • Revenue • Cost of Merchandise Sold • Gross Profit on Sales • Expenses • Net Income

  5. Go to this site… • http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/ • Read up on the Income Statement details and example and answer the questions on the next slides on lined paper. Use complete sentences by rephrasing the ? in your answer.

  6. Questions about Income Statement • Explain the Matching Principle • What is another name for the Income Statement? • What timeframe does the I.S. provide financial data for? • What are the I.S. Accounting Types? (List them) • Write out the format for the I.S.

  7. More Questions…Yipee! • What relationship does Gross Margin show? • Our book calls Gross Margin by another name, what is it? • How is the Gross Margin % calculated? • What does the G.M. % tell you? • What is “other revenue?”

  8. Final Questions… • What happens to the I.S. account balance at the end of the year? • Describe one new thing you learned today!

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