ACCOUNTING CYCLE OF A CORPORATION

Analyzing Financial Statements

TRIAL BALANCE

What is Trial Balance?

Trial Balance – is a summary of accounts with open balances. The equality of debit and credit balances in the ledger should be tested periodically by preparing trial balance.

INCOME STATEMENT

What is Income Statement?

This financial statement presents income, expenses and the performance of the company, which is either net income or loss

Income StatementSelling Expenses - Costs that

a business incurs to market and distribute its products that can include such things as advertising,  commissions and salaries, salesoffice expenses, and shipping charges. Selling expenses are a form of operating expense and are included on a business' income statement for the period in which they occurred under the accrual method of accounting.

Income StatementThe expenses that an organization incurs

not directly tied to a specific function such as manufacturing/production or sales. These expenses are related to the organization as a whole as opposed to an individual department; also referred to as "administrative cost." 

BALANCE SHEET

What Is Balance Sheet?

A Statement of Financial Position is a formal statement of the assets, liabilities and owner’s equity of the business as of a given date.

SHAREHOLDER’S EQUITY SECTION

CAPITAL STATEMENT