Analysis of Financial Statements for Chaudhry Asad Company

Running head: ACCOUNTING AND INFORMATION SYSTEM
Accounting and Information System
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ACCOUNTING AND INFORMATION SYSTEM
Table of Contents
Introduction......................................................................................................................................2
Analysis of Financial Statements.....................................................................................................2
Reference.........................................................................................................................................6
Appendix..........................................................................................................................................7

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ACCOUNTING AND INFORMATION SYSTEM
Introduction
The report which is being prepared for Chaudhry Asad Company which will be analyzing the
financial statement which the company has prepared for the purpose of better understanding of
the items which are shown in the financial statements. The transactions which are undertaken by
the business mostly related to the general functioning of the business. The company is engaged
in trading of socks. The transactions are passed as journal for the purpose of recording the same
in the books of accounts of the business. The financial statements of the Chaudhry Asad
Company are presented in the appendix section which is shown below.
Analysis of Financial Statements
The business has prepared a trial balance which shows all the transactions which the
business incurs during the month of May. The trial balance is used for checking the numerical
accuracy of the trial balance. The debit side and the credit side total of the trial balance should
match in order to show that the financial statements which are being prepared are free from
errors ion calculations (Lawrence 2013). The trial balance as prepared by the business shows that
the company has generated sales of $ 9,829 during the month and the cost of good sold is shown
to be $ 5,932which is directly associated with the production of goods which is being sold by the
business. In addition to this, the trial balance shows the collection of all items which the business
has or transacted during the month of May which includes assets, liabilities, owner’s capital,
income and expenses of the business. The trial balance of the company matches which is shown
to be $ 566,660 and the same is shown in the appendix section.
The profit and loss account of the business shows the profit which the business is able to
generate during the month (Zhang and Andrew 2014). The profit and loss account of the business