By Jewell Cochran
Accounting is the art of recording the financial events that occur in your business. Think of financial statements as the “diary of your organization.” The following four statements help tell that story:
- The Statement of Financial Position reports financial health at a particular date in time (i.e., as of the last day of the month). It summarizes assets, liabilities, and net assets.
- The Statement of Revenue and Expenditures compares actual performance to budget benchmarks for a particular period in time (i.e., activity during a month). It reports Revenue, Expenses, and Net Income/(Loss).
- The Statement of Activities is similar to the Statement of Revenue and Expenditures that includes a reconciliation to Net Assets from the Statement of Financial Position.
- The Statement of Cash Flow is a report of operating activity and non-cash items (i.e., accounts receivable, accounts payable) to reconcile to the cash balance in the bank.