Tutorial "Balance Sheet, Income Statement, and Cash Flow Report"


The most helpful and commonly used reports in accounting are the Balance Sheet, Income Statement (sometimes called the Profit and Loss Statement), and the Cash Flow Report. These reports enable the business to see where it has come from and where it is going financially.


1. Balance Sheet

The balance sheet gives a snapshot of the company's accounts. The total value of assets, liabilities, and stockholder equity are shown. This report is often a good way to compare how the company has changed from one period to the next.


In theory a company will close out the books before running a balance sheet report. This would move all activity out of Revenues and Expenses and into Retained Earnings. Our balance sheet shows Revenues and Expenses in case a close out has not been performed.


Lets run a balance sheet for FredsFlowersR1.

From the Main Menu:

  1. Open FredsFlowersR1

  2. Click the Reports button

  3. Choose Bookkeeping Reports from the list

  4. Click Select Report

  5. Choose Balance Sheet from the list

  6. Click Customize Report

This is the screen for customizing the details of the report. The first entry is the Report Name. A default name is entered for you but you should change the name to reflect the report you are running.

  1. Enter FredsFlowers Balance Sheet in the Report Name field


The Level of Detail allows you to see more information than the default report settings allow for. The default is to summarize the accounts into their respective types for a more concise picture. If you want to see the account balances you would choose Accounts from the list.

  1. Choose Account Types from the Level of Detail list.


The report can show any given dates in columns so as to compare one period to another.

  1. Choose 1 from the Number of Columns list.

  2. Type 12-31-1999 in the Date 1 field.


Lastly, the report does not have to view all the accounts in the system. You could run the report and just view the balance on your bank accounts if you were to choose them from the list and click Choose Accounts. For now we will look at all accounts.

  1. Click the radio button next to All Accounts

  2. Click Run Report


The balance sheet for 12-31-1999 shows up in a new window. It lists the account types and the sums of the accounts of those types.


Let's change some settings.

  1. Close the window for the balance sheet that just came up

  2. Change the Level of Detail to Accounts

  3. Click Run Report


Notice that now the individual accounts are listed in the report with their balances.


  1. Close the window for the balance sheet that just came up

  2. Change Number of Columns to 2.

  3. Type 11-31-1999 in the Date 1 field

  4. Type 12-31-1999 in the Date 2 field

  5. Click Run Report


Now we have a comparison of the end of November with the end of December. You can have up to 4 columns in this version of the program.


  1. Close the window for the balance sheet that just came up

  2. Click the Radio Button next to Choose Accounts

  3. Click on these accounts in the list

Cash

Freds Bank

  1. Click Run Report


The report will notify you that this may not be a complete balance sheet and show the balances for the accounts that you have chosen.



2. Income Statement

The income statement is sometimes called the profit and loss statement because it shows the company's profit or loss. This is the statement that one would use for figuring income taxes.


Lets run an income statement for FredsFlowersR1.

From the Main Menu:

  1. Open FredsFlowersR1

  2. Click the Reports button

  3. Choose Bookkeeping Reports from the list

  4. Click Select Report

  5. Choose Income Statement from the list

  6. Click Customize Report


This is the screen for customizing the details of the report. The first entry is the Report Name. A default name is entered for you but you should change the name to reflect the report you are running.

  1. Enter FredsFlowers Income Statement in the Report Name field

  2. Choose Tax Income for Type of Income Statement

You can choose up to 4 years to view and compare.

  1. Click on the year(s) for which you want to see the income statement. --1999

  2. Click Run Report


The report is run showing the business revenues and expenses for 1999. Notice the arrows to the left of the items in the report.

  1. Click the arrow next to Sales Revenue.


The item will be expanded so that the parts that make up the item are displayed.

  1. Click the arrow next to the Sales Revenue account


The sub accounts will show with balances. The sub accounts are hyperlinks to a list of transactions that affect these sub accounts.

  1. Click the first sub account


A window will open that shows the transactions for this sub account.

  1. Click the Radio button next to the first entry and click View.


The view transaction screen will appear to let you see the whole transaction. If you need to edit the transaction you can do so just like in a normal view screen. Click the edit radio button and then the Edit button.



3. Cash Flow Statement

The cash flow statement allows a business to see how it's assets are being allocated.

Lets run a Cash Flow statement for FredsFlowersR1.

From the Main Menu:

  1. Open FredsFlowersR1

  2. Click the Reports button

  3. Choose Bookkeeping Reports from the list

  4. Click Select Report

  5. Choose Cash Flow from the list

  6. Click Customize Report


This is the screen for customizing the details of the report. The first entry is the Report Name. A default name is entered for you but you should change the name to reflect the report you are running.

  1. Enter FredsFlowers Income Statement in the Report Name field

  2. Click Yes for Display All Accounts


Like the balance sheet and income statement this report can show more than 1 column of data. In this cash the cash flows from one date to the next should be entered for each column desired.

  1. Select 1 for Number of Columns

  2. Enter for Date Range 1: From 1-1-1999 To 12-31-1999

  3. Click Run Report


Now enter data for two periods to be compared. Also, remember that Freds Flowers is not on a calendar year.

  1. Go back to the customize report screen.

  2. Change Date range 1: From 2-1-1999 To 4-30-2000

  3. Enter Date Range 2: From 5-1-1999 To 7-31-2000

  4. Select 2 from Number of Columns

  5. Now run report again.


You will see that two columns of numbers appear. The report can be used to compare any two periods to each other. Common comparisons are quarters to previous quarters or last year's quarters and year to year comparisons.



Copyright (c) 2001 HLR
Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.1; A copy of the license is available at http://www.gnu.org/licenses/licenses.html#FDL.

Updated: $Id: report1_tutorial.html,v 1.1.1.1 2001/08/09 19:03:10 moreejt Exp $