This article will discuss four key financial statements that summarize your company's financial activity and status prescribed by Generally Accepted Accounting Principles (GAAP) and the Financial Accounting Standards Board (FASB). For more information about the year end process, refer to About closing your books at year-end.
The Profit & Loss report is also known as the Income Statement.
It summarizes your income and expenses so you know if you are operating at a profit or a loss. The report shows subtotals for each income and expense account in your chart of accounts. The last line on the report shows your net income or loss.
To run the Profit & Loss report:
The Balance Sheet summarizes your company's financial position. It shows the value of a company's assets less its liabilities and equity. It is called a balance sheet because the assets must always equal (or balance) the sum of the liabilities and equities.
To run the Balance Sheet:
The Statement of Cash Flows is also known as:
The Statement of Cash Flows uses the accrual based P&L and the accrual based B/S to show you how and why your cash position has changed over a period of time.
It calculates Ending Cash from:
To run the Statement of Cash flows report:
The Statement of Changes in Retained Earnings shows the changes in Retained Earnings from one period to another.
QuickBooks does not produce this statement, but you can run a similar report: