Summary of Four Basic Financial Statements

Here is a summary of the four basic financial statements.

Profit and Loss Statement or Income Statement

The Income Statement or Profit and Loss Statement gives you a detail of your company's gross income, expenses and net income for a given time period. Click here to learn more about the profit and loss statements as well as various types of income statements.

Balance Sheet

The Balance Sheet gives you a detail of all your assets, liabilities and total equity as of a given date. For an explanation of how to read and understand the balance sheet, click here.

Statement of Cash Flows

The Statement of cash Flows shows the source and use of your company's cash during a given time period. Here is a detailed explanation of the statement of cash flows and it's uses.

Equity Statement or Statement of Retained Earnings

This information can be included in the balance sheet or listed as a separate report and depends on what type of company you have and how many owners there are. For details about the different kinds of equity statements, click here.

Additional Reports Helpful in Bookkeeping

In addition to the four basic financial statements, here are some detailed reports that are helpful to you as a bookkeeper, either for accounting purposes or to help understand and facilitate the financial operations of the company you are working with.

Accounts Receivable

Accounts Receivables is listed as an asset on your balance sheet with the expectation that the money will be received. However a detailed accounts receivable report can give you a better idea of what is collectible and what should be written off as bad debt.

Click here for more information about the accounts receivable report.

Accounts Payable

Accounts payable is listed as a liability on your balance sheet because it is money that you owe and is deducted from the total net worth of your company. A detailed accounts payable report will tell you how much you owe to each of your vendors and creditors and when the money is due to them.

Budget Vs Actual

A Budget vs Actual Report is a variation of the Profit and Loss Statement which will show a side by side comparison of your forecasted income and expenses for the given accounting period versus your actual income and expenses for that same period. You can learn more about the budget vs actual report by clicking here.

General Ledger

This report is used mainly for accounting purposes. The general ledger is sometimes called the "Bible" of your company. It lists every single transaction for a given time period, sorted by account. To understand the general ledger report more fully, click here.

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