Journal Entries are logs of financial activities. They are essential tools to present business activities in a clear and understandable format using numbers.
Statement of Cash Flows (SCF) shows where a business’ money came from and where it spent that money. It shows a business’ ability to manage cash and solvency.
Income statement (or Profit & Loss Statement, P&L) shows how much profit a business has made after deducting expenses from its revenue.
Statement of Changes in Equity shows what caused the owner’s equity to increase or decrease in a certain period. It provides clarity of ownership in a business.
Financial Statements are reports that summarize how well a business is doing financially. They use numbers to convey a company’s performance.
Balance sheet is a financial statement showing what a company owns, what this company owes, and what’s left over. It shows how healthy a company is.
Shareholder’s Equity is what’s left over after we deduct the liabilities from the assets. It is the third & last type of account presented on the Balance Sheet.
Liability is what a business owes. As one of the three types of accounts on the Balance Sheet, liability is an important area in accounting & financial analysis.
Asset is what a company has, what a company owns. As one of the three types of accounts on the Balance Sheet, asset is a crucial element in accounting & finance.
Debits and Credits are increases/decreases in an account balance. Depends on the type of the account, debit and credit can mean either an increase or decrease.