List of accounting schedules to prepare financial reports
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Accounts Receivable and Payable
Most companies do not pay for the products they purchase in cash at the time the purchase is made. Payment terms are industry standard. Company "A" purchases $50,000 of widgets from Company "B." Company "A" has 90 days -- or whatever the agreed-to terms are -- to send Company "B" a check. Company "A" shows the purchase of the products as an asset and in its accounts payable. Company "B" shows the $50,000 in revenues and in its accounts receivable. Accounts receivable aging schedules show the company that owes the money, how much, when it's due and how old it is. The longer a receivable is outstanding past its due date, the riskier it is to collect.
Cash Flow
Cash flow schedules show how much cash the company has coming in and from what sources. It also shows how much cash the company has sent out and for what purposes. The cash flow statement is important because the company may be in a profitable position but not have enough cash to pay its immediate bills.
Operating Statements
The profit-and-loss statement calculates the net income of the company. Think of it as a movie that takes place over a period of time. Statements reflect the month's or year's activities. Expenses are subtracted from sales or revenues, and whatever is left is the profit. The balance sheet is a snapshot; it is accurate only at the moment of completion. A yearly balance sheet shows how the company stands at the end of the year, not how it performed throughout the year. Balance sheets are based on the formula "assets minus liabilities equal net worth" -- sometimes called "owner's equity."
Most companies do not pay for the products they purchase in cash at the time the purchase is made. Payment terms are industry standard. Company "A" purchases $50,000 of widgets from Company "B." Company "A" has 90 days -- or whatever the agreed-to terms are -- to send Company "B" a check. Company "A" shows the purchase of the products as an asset and in its accounts payable. Company "B" shows the $50,000 in revenues and in its accounts receivable. Accounts receivable aging schedules show the company that owes the money, how much, when it's due and how old it is. The longer a receivable is outstanding past its due date, the riskier it is to collect.
Cash Flow
Cash flow schedules show how much cash the company has coming in and from what sources. It also shows how much cash the company has sent out and for what purposes. The cash flow statement is important because the company may be in a profitable position but not have enough cash to pay its immediate bills.
Operating Statements
The profit-and-loss statement calculates the net income of the company. Think of it as a movie that takes place over a period of time. Statements reflect the month's or year's activities. Expenses are subtracted from sales or revenues, and whatever is left is the profit. The balance sheet is a snapshot; it is accurate only at the moment of completion. A yearly balance sheet shows how the company stands at the end of the year, not how it performed throughout the year. Balance sheets are based on the formula "assets minus liabilities equal net worth" -- sometimes called "owner's equity."
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