BUS 101 Lecture Notes - Trial Balance, Financial Statement, Income Statement
Document Summary
Prepare financial statements from an adjusted trial balance. Preparing financial statements from an adjusted trial balance. Step 1: create an income statement using the modified trial balance"s revenue and expense accounts. Step 2 prepare an owner"s equity statement utilizing capital and withdrawals from the adjusted trial balance, as well as net income from step 1. Step 3 prepare a balance sheet based on the altered trial balance"s asset and liability accounts, as well as the updated capital balance from step 2. Step 4 for the period, prepare a statement of cash flows from changes in cash flows. Compute profit margin and describe its use in analyzing company performance. Profit margin ratio compares a company"s net income to its net sales. Prepaid costs are those that are paid for in advance. When you pay for something that you will get in the near future, you incur a prepaid expenditure.
