FABM2_LT#2 PDF - Statement Of Changes of Equity

STATEMENT OF CHANGES OF EQUITY need more than one capital account. It follows that the number of capital accounts must be equal to the - Reports the change...

STATEMENT OF CHANGES OF EQUITY need more than one capital account. It follows that the number of capital accounts must be equal to the - Reports the changes in company number of partners. equity, from an opening balance to and end of period balance. The changes include the earned profits, dividends, inflow of equity, withdrawal of equity, net loss. Increased by Decreased by Net income Net loss Owner investment Withdrawals by of cash or other owner or assets distribution of CORPORATION assets to owner - A corporation is an organization — usually a group of people or a company — authorized by the state SOLE PROPRIETORSHIP to act as a single entity and recognized as such in law for certain purposes. EQUITY ACCOUNTS Capital Stock - Reflects the par value of the issued common shares. Par value is the minimum price by which corporations can issue stocks to shareholders Additional Paid-In Capital PARTNERSHIP - Corporations generally issue - A partnership is composed of two or stocks in exchange for an more partners who invest money, amount greater than par. property or industry into a common The excess of the issue price fund with the intention of dividing over the par value is the profit among themselves. Since there are more than one owner, we  reported as Additional Paid-In Capital Retained Earnings - Undistributed earnings of a corporation. It can be reduced by what we call dividends which are distributions to stockholders, similar to owner’s drawings in sole proprietorships REMEMBER! - Cash flow statement should only include the cash transactions Cash flows from Operating Activities - Operating activities generally involve providing services, and producing and delivering goods. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of profit STATEMENT OF CASH FLOWS or loss - A summary of the cash flows of the Cash Inflows business during a period of time and Receipts from sale of goods and the change in the cash balance. It performance of services from classifies cash receipts (inflows) and customers cash payments (outflows) into Receipts from royalties, fees, operating, investing and financing commissions and other revenues activities. Cash Outflows Payment to suppliers of goods and services Payments to employees Payments for taxes Payments for interest expense  Payments for operating expenses Receipts from issuance of notes payable or long-term payables Cash Flows from Investing Activities - Investing activities include making Cash Outflows and collecting loans; acquiring and Payments to owners in the form of disposing of investments in debt or withdrawals or dividends equity securities; and obtaining and Payments to settle long-term selling of property and equipment payables and other productive assets Cash Inflows Receipts from sale of property, equipment, intangible assets and long-term assets Receipts from sale of investments in debt or equity securities Receipts from collections on long-term notes receivable Cash Outflows Payments to acquire property, equipment, intangible assets and long-term assets Payments to acquire debt or equity securities Payments for long-term notes receivables Cash Flows from Financing Activities Financing activities include obtaining resources from owners and creditors Cash Inflows Receipts from investments by owners