Terms Introduced in the Chapter

The end products of the accounting process that a company prepares and publishes, showing its financial results for a period and its financial position on a given date. They mainly comprise the Statement of Profit and Loss and the Balance Sheet, and exist to provide information for th …

The financial statement that summarises a company's total revenue and expenses over an accounting period to arrive at the profit or loss earned. It is presented in the prescribed vertical format of Sche …

A statement that lists, as on a particular date, all the assets a company owns and all the claims against them — the liabilities owed to outsiders and the funds belonging to the owners. It depicts the financial position or strength of the company and is drawn up i …

An expense line in the Statement of Profit and Loss representing the cost of raw materials actually used during the period. It is computed as opening stock of materials plus purchases of materia …

The owners' stake in the company, made up of Share Capital plus Reserves and Surplus (and any money received against share warrants). It is the first sub-head shown under Equity and Liabili …