Financial Statements & Reporting

Asset

A resource expected to provide future economic benefit, such as cash, equipment, inventory, or receivables.

Balance Sheet

A statement reporting assets, liabilities, and equity at a specific point in time.

Book Value

The amount at which an asset, liability, or equity item is recorded in accounting records.

Cash Flow Statement

A statement showing cash provided or used by operating, investing, and financing activities.

Equity

The residual interest in a business after liabilities are subtracted from assets.

Expense

A cost incurred in the course of earning revenue or operating a business.

Financial Statements

Formal reports summarizing financial position, operating results, cash flows, and changes in equity.

Going Concern

The assumption that an entity will continue operating for the foreseeable future.

Income Statement

A statement reporting revenue, expenses, and profit or loss over a specific period.

Liability

A present obligation that may require a future transfer of cash, goods, services, or other resources.

Materiality

The significance of an item or error such that it could influence a financial-statement user’s decision.

Net Income

The amount remaining after expenses, losses, and taxes are deducted from revenue and gains.

Net Loss

A negative result that occurs when total expenses and losses exceed total revenue and gains.

Profit and Loss Statement

Another name for an income statement, commonly called a P&L.

Retained Earnings

Cumulative profits retained in the business rather than distributed to owners.

Revenue

Income earned from a company’s primary activities, such as selling products or providing services.

Statement of Cash Flows

Statement of Retained Earnings

A schedule showing changes in retained earnings during a reporting period.