Financial statement

: )Income Statement( ‫ قائمه الدخل‬-1

An income statement or profit and loss account is one of the financial statements of a
company and shows the company’s revenues and expenses during a particular period

‫وهي القائمة التي تظهر إيرادات الفترة المالية ومصروفاتها وبالنتيجة ما حققه المشروع خالل‬
. ‫الفترة المالية من صافي دخل (ربح) أو صافي خسارة‬
 ‫‪ -2‬الميزانية العمومية (‪: )Balance Sheet‬‬
‫‪a statement of the assets, liabilities, and capital of a business or other organization at a‬‬
‫‪particular point in time, detailing the balance of income and expenditure over the preceding‬‬
‫‪.period‬‬

‫تسمي أيضا قائمة المركز المالي ‪ ،‬حيث تظهر أصول المنشأة والتزاماتها وحقوق الملكية كما‬
‫هي فى لحظة معينة ‪.‬‬
‫يمكن تقسيم األصول إلي أنواع عدة إن ما استعرضناه فى الوحدات السابقة من أصول يمكن‬
‫تقسيمه إلى مجموعتين رئيسيتين هما‪:‬‬

‫أ – األصول المتداولة (‪: )Current Assets‬‬

‫وهي الموجودات التي تحوزها المنشأة سواء في شكل نقدي أو التي يتوقع بيعها أو استهالكها أو‬
‫تحويلها إلى نقدية خالل الفترة المالية (عادة سنة) من تاريخ الميزانية العمومية ‪.‬‬
‫بمعني آخر ‪ ،‬إن النقد في الصندوق وأي أصل يتوقع أن يتحول إلى نقد أو يستهلك خالل السنة‬
‫القادمة يسمي أصوال متداولة‪.‬‬

‫ب – األصول الثابتة (‪: )Fixed Assets‬‬

‫وهي الموجودات الملموسة التي حصل عليها المشروع بغرض استخدامها في اإلنتاج أو في‬
‫تقديم الخدمات للزبائن وليس غرض بيعها‬
 ‫أما بالنسبة لاللتزامات فإنه أيضا يمكن تقسيمها إلى قسمين ‪:‬‬

‫أ – االلتزامات قصيرة األجل ( المتداولة ) ‪:‬‬

‫وهي االلتزامات التي تستحق السداد خالل السنة المالية من تاريخ الميزانية مثل الذمم الدائنة‬
‫والرواتب المستحقة ‪.‬‬

‫ب‪ -‬االلتزامات طويلة األجل‪:‬‬

‫وهي االلتزامات التي تستحق السداد عد فترة زمنية أكثر من سنة مثل القروض البنكية ‪.‬‬
 ‫‪ -3‬قائمة حقوق الملكية (‪: )Owner’s Equity Statement‬‬

‫‪portrays changes in the capital balance of a business over a reporting period‬‬

‫وهي القائمة التي تظهر التغيرات التي حدثت علي رأس مال المالك للمنشأة منذ بداية الفترة‬
‫وحتي نهايتها‪.‬‬
 : ) Cash Flows Statement( ‫ قائمة التدفق النقدي‬-4
‫وهي القائمة التي تظهر المقبوضات النقدية والمدفوعات النقدية التي حدثت خالل الفترة‬
‫المالية‬

is a financial statement that shows how changes in balance sheet accounts and income ,
affect cash and cash equivalents, and breaks the analysis down to operating, investing, and
.financing activities
 Debit and credit
‫ المدين‬: Depit
an entry recording a sum owed, listed on the left-hand side or column of an account

‫ مدرًج ا على الجانب األيسر أو عمود الحساب‬، ‫إدخال يسجل مبلًغا مستحًقا‬

‫ الدائن‬:credit
 .an entry recording a sum received, listed on the right-hand side or column of an account

.‫ مدرًج ا على الجانب األيمن أو عمود الحساب‬، ‫إدخال يسجل مبلًغا مستلًما‬

.The difference between debit and credit cards

Debit and credit cards are both used to pay for goods or services without paying in cash or
writing a check. The difference between the two is where the money to pay for the purchase
.comes from

.First: Debit what comes in, Credit what goes out

.Second: Debit all expenses and losses, Credit all incomes and gains

.Third: Debit the receiver, Credit the giver

Three Types of Accounts

Real Accounts .1

.“All assets of a firm, which are tangible or intangible, fall under the category “Real Accounts

Tangible real accounts are related to things that can be touched and felt physically. Few
.examples of tangible real accounts are building, machinery, stock, land, etc

Intangible real accounts are related to things that can’t be touched and felt physically. Few
.examples of such real accounts are goodwill, patents, trademarks, etc

Personal Accounts .2

These accounts are related to individuals, firms, companies, etc. A few examples of personal
accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit
.customers, accounts of goods suppliers, capital, drawings, etc
Nominal Accounts .3
Accounts which are related to expenses, losses, incomes or gains are called Nominal
accounts. The dictionary meaning of the word “nominal” is “existing in name only” and the
meaning remains absolutely true in accounting sense too, because nominal accounts do not
really exist in physical form, but behind every nominal account money is involved. E.g.
.Purchase A/C, Salary A/C, Sales A/C, Commission received A/C, etc
 Exampels
The owner invested $30,000 cash in the corporation. We analyzed this transaction by .1
increasing both cash (an asset) and common stock (an equity) for $30,000. We learned you
increase an asset with a DEBIT and increase an equity with a CREDIT. The journal entry
:would look like this
 Debit Credit
Cash 30,000
Common Stock 30,000
Purchased $5,500 of equipment with cash. We analyzed this transaction as increasing .2
the asset Equipment and decreasing the asset Cash. To increase an asset, we debit and to
:decrease an asset, use credit. This journal entry would be

Debit Credit
Equipment 5,500
Cash 5,500
Purchased a new truck for $8,500 cash. We analyzed this transaction as increasing the .3
asset Truck and decreasing the asset Cash. To increase an asset, we debit and to decrease
:an asset, use credit. This journal entry would be

Debit Credit

Truck 8,500
Cash 8,500
Purchased $500 in supplies on account. We analyzed this transaction as increasing the .4
asset Supplies and the liability Accounts Payable. To increase an asset, we debit and to
:increase a liability, use credit. This journal entry would be

Debit Credit
Supplies 500
Accounts Payable 500
Paid $300 for supplies previously purchased. Since we previously purchased the supplies .5
and are not buying any new ones, we analyzed this to decrease the liability accounts payable
.and the asset cash. To decrease a liability, use debit and to decrease and asset, use debit

Debit Credit
Accounts Payable 300
Cash 300
Paid February and March Rent in advance for $1,800. When we pay for an expense in .6
advance, it is an asset. We want to increase the asset Prepaid Rent and decrease Cash. To
.increase an asset, we debit and to decrease an asset, use credit
Debit Credit
Prepaid Rent 1,800
Cash 1,800
Performed work for customers and received $50,000 cash. We analyzed this transaction .7
to increase the asset cash and increase the revenue Service Revenue. To increase an asset,
.use debit and to increase a revenue, use credit

Debit Credit
Cash 50,000
Services Revenue 50,000
Performed work for customers and billed them $10,000. We analyzed this transaction to .8
 increase the asset accounts receivable (since we have not gotten paid but will receive it
later) and increase revenue. To increase an asset, use debit and to increase a revenue, use
.credit

Debit Credit
Accounts Receivable 10,000
Services Revenue 10,000
Received $5,000 from customers from work previously billed. We analyzed this .9
transaction to increase cash since we are receiving cash and we want to decrease accounts
receivable since we are receiving money from customers who we billed previously and not
.new work we are doing. To increase an asset, we debit and to decrease an asset, use credit

Debit Credit
Cash 5,000
Accounts Receivable 5,000
Paid office salaries $900. We analyzed this transaction to increase salaries expense and .10
decrease cash since we paid cash. To increase an expense, we debit and to decrease an
.asset, use credit

Debit Credit
Salaries Expense 900
Cash 900
Paid utility bill $1,200. We analyzed this transaction to increase utilities expense and .11
decrease cash since we paid cash. To increase an expense, we debit and to decrease an
.asset, use credit

Debit Credit
Utilities Expense 1,200
Cash 1,200

: ‫بعض تعاريف المحاسبة‬

.Accounts Payable - money owed by company to its creditors, vendors, etc

Accounts Receivable - money owed to a company by its debtors , i.e.: credit sales

Accrual Accounting - a method in which income is recorded when it is earned and expenses
are recorded when they are incurred
Cash-Basis Accounting - a method in which income and expenses are recorded when they
.are paid

Cost Accounting - a type of accounting that focuses on recording, defining, and reporting
costs associated with specific operating functions

Financial Statement - a record containing the balance sheet and the income statement

Income Statement - An income statement or profit and loss account is one of the
financial statements of a company and shows the company’s revenues and
expenses during a particular period

Balance Sheet - a statement of the assets, liabilities, and capital of a business or other
organization at a particular point in time

The cash flow statement is a financial statement that shows how changes in balance
sheet accounts and income affect cash and cash equivalents, and breaks the
.analysis down to operating, investing, and financing activities

Equity - " equity is the difference between the value of the assets and the value of the
liabilities of something owned

Credit - an account entry with a negative value for assets, and positive value for liabilities
.and equity

Debit - an account entry with a positive value for assets, and negative value for liabilities and
.equity

Depreciation - recognizing the decrease in the value of an asset due to age and use

Double-Entry Bookkeeping - system of accounting in which every transaction has a

corresponding positive and negative entry (debits and credits)

Asset - , an asset is any resource owned by the business. Anything tangible or

intangible that can be owned or controlled to produce value and that is held by a
.company to produce positive economic value is an asset

Liability - money owed to creditors, vendors, etc

.Fixed Asset - long-term tangible property; building, land, computers, etc

Current assets include cash and cash equivalents, accounts receivable, inventory,
,marketable securities

A fixed liability is a type of debt. Bonds, mortgages and loans that are payable over a term
exceeding one year

,current liabilities: Obligations such as deferred dividend, trade credit, and unpaid taxes

General Ledger - contains all the accounts for recording transactions relating to a
company's assets, liabilities, owners' equity, revenue, and expenses

,Income definition, the monetary payment received for goods or services

Liquid Asset - cash or other property that can be easily converted to cash

Loan - money borrowed from a lender and usually repaid with interest

Net Income - money remaining after all expenses and taxes have been paid

"Note - a written agreement to repay borrowed money; sometimes used in place of "loan

Operating Income - income generated from regular business operations

Payroll - a list of employees and their wages

,dividend : A share of the after-tax profit of a company

Petty cash is a small amount of cash on hand that is used for paying small amounts

A ratio: shows the relative sizes of two or more values Ratios can be shown in different
.ways
The gross profit margin : shows total revenue minus the cost of goods

trial balance a statement of all debits and credits in a double-entry account book, with
.any disagreement indicating an error

Budgeting is the process of creating a plan to spend your money

Working capital the capital of a business which is used in its day-to-day trading
.operations, calculated as the current assets minus the current liabilities

Retained earnings (RE) is the amount of net income left over for the business after
it has paid out dividends to its shareholders

Marketable securities are securities or debts that are to be sold or redeemed

.within a year
General journal is a daybook or journal which is used to record transactions relating
,to adjustment entries

A journal entry is the logging of a transaction in an accounting journal that shows a

.company's debit and credit balances

Adjusting entries adjusting entries are journal entries usually made at the end of an
accounting period to allocate income and expenditure to the period in which they
actually occurred

Closing entries are journal entries made at the end of an accounting period to
transfer temporary accounts to permanent accounts

An accrued expense is an accounting expense recognized in the books before it is

paid for

A prepaid expense is an expenditure paid for in one accounting period

Accrued revenue is a sale that has been recognized by the seller, but which has not
yet been billed to the customer

unearned revenue(s) definition. A liability account that reports amounts received in

advance of providing goods or services

bad debts a debt that cannot be recovered

gross profit the difference between revenue and the cost of making a product or
providing a service

sales activities related to selling or the number of goods or services sold in a given
time period

A sales discount is a reduction in the price of a product or service that is offered by

,the seller

Net sales are the sum of a company's gross sales minus its returns

Purchase discount is an offer from the supplier to the purchaser, to reduce the
payment amount

The bank reconciliation process

Access bank records. Access the on-line bank statement provided by the bank for the
company's cash account (presumably its checking account)

.. .Access software.
.Update uncleared checks.
.Update deposits in transit..
.. .Enter new expenses...
.Enter bank balance.
 .Review reconciliation...
.Continue investigation...

: The five (5) major categories in the financial ratios list include the following

.Liquidity Ratios
.Activity Ratios
.Debt Ratios
.Profitability Ratios
.Market Ratios

There are a lot of basic accounting principles, however the most important part, are the
:following four

cost principle
accrual accounting principle
matching principle
full disclosure principle

:The eight steps in the accounting cycle, in order, are

,transactions
,journal entries
,posting
,trial balance
,worksheet
,adjusting journal entries
financial statements
and closing of the books

financial accounting :1

is the field of accounting concerned with the summary, analysis and reporting of financial
transactions related to a business

‫المحاسبة المالية هي مجال المحاسبة المعنية بملخص وتحليل وإعداد التقارير للمعامالت المالية‬
‫المتعلقة باألعمال التجارية‬

:management accounting :2
the provision of financial data and advice to a company for use in the organization and
‫‪.development of its business‬‬

‫االدارة المالية ‪ :‬توفير البيانات المالية ونصح لشركة الستخدامها في تنظيم وتطوير أعمالها‪.‬‬

‫‪: costing accounting:3‬‬

‫‪the recording of all the costs incurred in a business in a way that can be used to improve its‬‬
‫‪.management‬‬

‫حساب التكاليف‬

‫تسجيل جميع التكاليف المتكبدة في األعمال التجارية بطريقة يمكن استخدامها لتحسين إدارتها‪.‬‬

‫‪: tax accounting :4‬‬

‫‪is governed by the Internal Revenue Code, which dictates the specific rules that companies‬‬
‫‪.and individuals must follow when preparing their tax returns‬‬

‫حساب التكاليف‬

‫يخضع لقانون اإليرادات الداخلية ‪ ،‬الذي يحدد القواعد المحددة التي يجب على الشركات‬
‫واألفراد اتباعها عند إعداد اإلقرارات الضريبية‪.‬‬