💡Financial statements are made up of the income statement and the balance sheet.
📊The income statement shows the organization's revenue, expenses, and profit or loss.
💰The balance sheet displays the organization's assets, liabilities, and equity.
⚖️The equation Assets = Liabilities + Equity guides the preparation of financial statements.
✍️Ensure you have accurate and complete data from your chart of accounts and trial balance to prepare financial statements.
What information is included in the income statement?
—The income statement includes revenue, expenses, and net profit or loss for a specific period.
What information is included in the balance sheet?
—The balance sheet includes assets, liabilities, and equity at a specific point in time.
How can I ensure accuracy when preparing financial statements?
—To ensure accuracy, double-check your data from the chart of accounts and trial balance, perform reconciliations, and follow accounting principles and standards.
What is the purpose of preparing financial statements?
—Financial statements provide valuable information about a company's financial performance, position, and cash flow. They are essential for decision-making, compliance, and investor analysis.
Can I use financial statements to evaluate my company's financial health?
—Yes, financial statements help evaluate a company's financial health by providing insights into profitability, liquidity, solvency, and efficiency.
00:00In this training, Excel with Amaka explains how to prepare accurate financial statements.
00:30Financial statements are made up of the income statement and the balance sheet.
01:10The income statement shows revenue, expenses, and profit or loss.
03:12The balance sheet displays assets, liabilities, and equity.
05:30The equation 'Assets = Liabilities + Equity' guides the preparation of financial statements.
07:20To ensure accuracy, gather accurate data from your chart of accounts and trial balance.
13:50Perform calculations and reconcile data to prepare accurate financial statements.
14:40Financial statements provide valuable insights into a company's financial health and are essential for decision-making and compliance.
15:50Evaluate your company's financial health using financial statements.
