Case Introduction

In business, every financial event, big or small, impacts the financial statements and the financial prospects of the company. 

The upcoming exercise will help you understand the basics of accounting and the impact of different financial events on the financial health of a company. The exercise revolves around a pizza food truck business. 

In the upcoming video, our faculty member Marie-Lys will introduce you to the situation in detail. 

Note: Download the following excel file. This file will help you participate in the activity throughout the session.

In the video, you learnt the following:

• The cash injected by the food truck owner into the business is called the ‘share capital’.

• The raw materials purchased to manufacture the pizza will be recorded as ‘inventory’.

• The ‘cash balance’ on the assets side of the balance sheet is the ‘cash at the end’ value from the cash flow statement. 

• The ‘total of assets’ is always equal to the ‘total of liabilities and equity’.

In the next segment, you will see how different activities for the month of January impacts the three financial statements.