FINANCIAL STATEMENTS (Review)
RSM 219 – Introduction to Financial Accounting
1
, FINANCIAL STATEMENTS
Companies prepare four basic financial statements:
• The balance sheet / statement of financial position reports the resources (assets)
owned by a company and the claims against those resources (liabilities and
shareholders' equity) at a specific point in time.
• The income statement / statement of earnings reports how well a
company has performed its operations (revenues, expenses, and income) over a period
of time.
• The statement of changes in equity / statement of retained earnings reports how
much of the company's net earnings was retained in the business, dividend distributions
to owners, the dollar amount of shares issued and repurchased, and other changes in
equity over a period of time.
• The statement of cash flows reports the sources and uses of a company’s
cash over a period of time.
2 Rotman School of Management - 2022
RSM 219 – Introduction to Financial Accounting
1
, FINANCIAL STATEMENTS
Companies prepare four basic financial statements:
• The balance sheet / statement of financial position reports the resources (assets)
owned by a company and the claims against those resources (liabilities and
shareholders' equity) at a specific point in time.
• The income statement / statement of earnings reports how well a
company has performed its operations (revenues, expenses, and income) over a period
of time.
• The statement of changes in equity / statement of retained earnings reports how
much of the company's net earnings was retained in the business, dividend distributions
to owners, the dollar amount of shares issued and repurchased, and other changes in
equity over a period of time.
• The statement of cash flows reports the sources and uses of a company’s
cash over a period of time.
2 Rotman School of Management - 2022
