The document discusses the main financial statements prepared by various organizations. These include the income statement, income and expenditure account, balance sheet, and cash flow statement. The income statement is used by sole proprietors, partnerships, and corporations to determine profit or loss. Cooperatives and non-profits use the income and expenditure account to calculate surplus or deficit. All organization types use the balance sheet to present assets, liabilities, and capital. The cash flow statement identifies cash inflows and outflows over time to measure liquidity and changes in cash.

1. Business Organisations Financial Statements
Section 2 Objective 4

2. Business Organisations
Financial Statements

3. Business organisations Financial Statements
• Section 2
• Objective 4
– Identify the main financial statements prepared by
various organisations

4. Business organisations Financial Statements

5. Business organisations Financial Statements
• Financial Statements are prepared from business
transactions.
• The main financial statements are:
– Income Statement (formerly known as Trading and
Profit and Loss account)
– Income and Expenditure account
– Balance Sheet
– Cash Flow Statement

6. Business organisations Financial Statements

7. Business organisations Financial Statements
• Financial Statements:
– Income Statement (Trading and Profit and Loss account)
• Is used to determine whether a firm makes profit or loss for a
particular period
• Firms which use this financial statement are
– Sole proprietor
– Partnerships
– Corporations

8. Business organisations Financial Statements

9. Business organisations Financial Statements
• Financial Statements:
– Income and Expenditure account
• Is used to determine whether a firm makes a surplus or a
deficit for a particular period
– Firms which use this financial statement are
• Cooperatives
• Non-Profit organisations

10. Business organisations Financial Statements

11. Business organisations Financial Statement
• Financial Statement:
– Balance Sheet
• Shows the worth of the organisation at a particular period of
time
• It is presented to show the firm assets, liabilities and capital
• Firms which use this financial statement are
• Sole traders
• Partnerships
• Corporations
• Cooperatives
• Non-Profit organisations

12. Business organisations Financial Statements

13. Business organisations Financial Statements
• Financial Statement:
– Cash Flow Statement:
• Identifies a firm’s cash inflows (receipts) and cash outflows
(payments)over a period of time
• Shows an organisation movement (changes) in cash for a
period of time
• Determines also, the liquidity of a company
– Companies may use this statement based on its
accounting policy