FFMA financial statements def and examples

Define income

Increases in assets or decreases in liabilities, result in increases in equity (excluding shareholders claims)

What are the two types of income

1. Revenue: sales of goods/ provision of service → regular activities

2. Other income: not revenue, e.g. profit on sale of property

Define expenses

Decreases in assets or increases in liabilities, results in decrease in equity (excluding shareholders claims)

Define an asset

Economic resource CONTROLLED by company with POTENTIAL TO PRODUCE ECONOMIC BENEFITS

Define Liability

Present obligation of company to transfer an economic resource as a result of past events

Define equity

Residual interest in assets of company after deducting all liabilities

Equity = assets - liabilities

What are the components of equity

Share Capital : nominal value of shares issued

Share premium : amount above nominal value of shares issued

Retained earnings: accumulated profit

Other reserves

Expense, asset, or liability: Rent

Expense

Expense, asset, or liability: Inventory

Asset

Expense, asset, or liability: Prepayments

Assets

Expense, asset, or liability: Insurance

Expense

Expense, asset, or liability: Overdraft

Liability

Expense, asset, or liability: Motor vehicles

Assets

Expense, asset, or liability: Corporation tax

Expense

Expense, asset, or liability: Post and packaging

Expense

Expense, asset, or liability: PPE

Asset

Expense, asset, or liability: Bank loan

Liability

Expense, asset, or liability: Fixtures and fittings

Asset

Expense, asset, or liability: Bank interest

Expense

Expense, asset, or liability: heating and lighting

Expense

Expense, asset, or liability: Accured revenue (money earned)

Asset

Expense, asset, or liability: Cash

Asset

Expense, asset, or liability: Trade payables

Liability

Expense, asset, or liability: Tax payable

Liability

Expense, asset, or liability: Other loans

Liability

Expense, asset, or liability: Phone and internet

Expense

Expense, asset, or liability: Trade receivables

Assets

Expense, asset, or liability: Cost of goods sold

Expenses

Expense, asset, or liability: Interest payable

Liability

Expense, asset, or liability: Machinery

Asset

Expense, asset, or liability: Accured expenses (costs not yet paid for)

Liability