What are the financial statements that are prepared at the end of the financial period, and what is the purpose of preparing them?
Income statement: Through this list, users can know the result of the company's work, whether profit or loss, by matching revenues with expenses during a specific financial period. Financial position statement (balance sheet): Through this list, users can know the financial position of the company and its assets ( Assets) and their liabilities at a specific moment. List of property rights: Through this list, users can know the changes that occurred in the rights of the owners of the company during a specific financial period. List of cash flow: Through this list, users can know the cash receipts (incoming) and payments Cash (out) to and from the company.
What are the operating expenses?
They are the expenses incurred by the company in order to achieve revenue, which are related to the main activity of the company, such as salaries and wages of employees, electricity and telephone expenses, etc., and can be divided into:
Administrative and general expenses
Selling and distribution expenses
3 What is the difference between net income and revenue?
Net income represents the revenues and gains that occurred during the financial period minus other expenses and losses. As for the revenue account, it represents the services that were provided to others or the goods sold during the current period in order to achieve income, whether they were received during the current period or not. As for the receipts, they are The amounts that have been received, whether they are received from the revenues or from the debtors or otherwise, the revenues are part of the receipts and not the other way around.
4 What is the difference between temporary accounts and permanent accounts?
Temporary accounts: They are the accounts that are opened during the period and closed at the end of the period, by transferring the balances of the debit accounts by recording them on the credit side, and transferring the accounts with credit balances by recording them on the debit side until their balance becomes zero, and the accounts that are closed at the end of the period are existing accounts Income (revenues, expenses, and income summary), as well as closing the personal withdrawals account in one of the property rights accounts (capital, current owner of the company, retained earnings).
Permanent accounts: These are the accounts that are not closed at the end of the financial period and appear in the statement of financial position at the end of the period.
5 What are the elements and items of the income statement with multiple stages in the service companies?
net operating income
revenue and other earnings
Other expenses and losses
net income before tax
income tax value
net income after tax
6 What are the elements and items of the statement of financial position?