FINANCIAL STATEMENTS

Financial statements are produced on a quarterly (monthly when we have paid staff)
basis after completing the bank reconciliation and the adjusting journal entries
for the current period. The three most useful statements are: the balance sheet,
the budget to actual statement and the statement of cash flows.

1. Balance sheet

* Records all activity for the organization from the beginning of operations. The
balance sheet classifies transactions by asset, liability, or net assets using the
formula: Asset - Liabilities = Net Assets.

* This report is accessed through Peachtree Accounting by selecting, This report
is dated on the last day of the current month reconciled.

2. Budget to actual income

* Income statement - Records transactions that increase and decrease revenue. The
net assets (i.e. income minus expenses) shows agency's profitable or loss during a
given period.

* The budget to actual income statements is created by using a spreadsheet program.
The reports show both the monthly and year-to-date income and expense statements.

* Income statements can be accessed by clicking on Peachtree Accounting's "Reports"
menu and selecting Financial Statements. In the Center Column under Report List
select "Income Stmnt."

* First, use the 1st through 30th/31st of the current month and year to analyze the budget to actual expenses. Then use the 1st day of the fiscal year through the last day of the current month (i.e. 7/1/96 through 1/31/97) to analyze the variance between budgeted and actual expenses.

* We will add Peachtree illustrations to show how to do this

3. Cash Flow

* We will explore using Peachtree Accounting to plan and produce our budget
instead of MSWord.

* We will explore using Peachtree to track cash flow.

* We will illustrate this process below once our explorations are completed.

* The Cash Flow Analysis will show the actual and projected cash inflows and
outflows. It will be useful in determining the our ability to cover monthly
expenses. The cash flow statement is used as a planning tool to determine
which expenses should or should not be incurred. Also, this report alerts
management if short term loans are needed.

Manual Contents Page

Uptown Multi-Cultural Art Center (UM-CAC). Click here for contact Info or to E-mail UM-CAC at umcac@art-teez.org click here. Ph.773/561-7676

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