Financial Statements Essay

Submitted By Deboze1958

Words: 456

Pages: 2

Open Document

There are four basis financial statements that are very important that are used by companies to determine their short and long financial position. They are considered the back bone of financial accounting. The balance sheet shows the total assets of a business. It is specifically for a certain period of time. The equation for the balance is that the total assets equal liabilities plus the owner’s equity. It will show you a detailed look at the finances showing one section with net worth and the other showing liabilities. Both sections should balance in the end. The income statement will tell you whether or not the business is successful. It shows the net income of the business after expenses are paid and shows the profits and the loss. It also represents a period time and is associated with the balance statement. The income statement will show potential investors whether the business made or loss money during a particular period.
The cash flow statement shows how well the finances are being managed. The statement of cash flows reports the cash effects of a business’s operation, investing and financing activities. (Kimmel, Weygandt, & Kieso, 2011,). It is a breakdown of what is coming in and what is going out of the business and shows if the business is financially sound.
The Equity statement shows the equity of shareholders and owners at the end of a financial period. It will show how they got to the balance and how it changed from one period to the next.
The financial statement is very useful to employees by providing them with a sense of job security if it is showing that the business if profitable. The majority of businesses will post their financial statement for existing and potential employees

Financial Statements Essay

Financial Statements Paper ACC/290 Principles of Accounting I 4/29/13 Financial Statements Paper When operating a business it is important that all shareholders are informed and allowed to access financial statements. Financial Statements are the core of financial accounting and allows shareholders to view all the income and expenses going in and out of the business. There are four basic financial statements that are all important in their own ways.…

Words 780 - Pages 4

Financial Statements Essay

Financial Statements Claudia Michel ACC/290 December 12, 2013 Mark Graves Financial Statements There are four basic financial statements. These are income statement, balance sheet, retained earnings statement, and statement of cash flows. A company uses financial statements to make information available about the business to internal and external users such as managers and creditors. Additionally managers and creditors use information on the statements to make important decisions such as making…

Words 801 - Pages 4

Application Of Financial Statement

Application of Financial Statement ACC 557 Ralph Palumbo November 27, 2011 Application of Financial Statement Question 1 Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. Answer The basic definition of a balance sheet is a statement, of a particular date/time, that shows the amount of assets owned by a business/company as well as the amount of liabilities and ownerâ€™s equity associated with those assets (Assets…

Words 763 - Pages 4

Questions On Financial Statement

Problem 2: a) Part of the Chief Executive’s job is to certify that the financial statements are true and correct and no fraud or misrepresentation took place while reporting on the financial health of the company. Steve Jobs is also certifying that the numbers reported in the Financial Statements are accurate and the organization followed the specified laws and procedures in establishing and maintaining internal controls over financial reporting and auditing. b) Prior to the enactment of the Sarbanes…

Words 546 - Pages 3

Financial Statements Essay

Matthew M. Christen 10/17/11 ACC 220 Week 2 Assignment: Financial Statements There are several tools that are used by accountants to assist in determining the value of a company. These include balance sheets, retained earnings statements, and statements of cash flow. A balance sheet is comprised of a company’s assets and liabilities. Assets are resources a business has and include cash, accounts receivable, and materials on hand. These are then compared with liabilities, or money owed, to…

Words 376 - Pages 2

Financial Statements Essay

The Accounting Standard AASB 101 Presentation of Financial Statements was made under section 334 of the Corporations Act 2001 and it prescribes the basis for presentation of general purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities. It also sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their…

Words 1531 - Pages 7

Financial Statements Paper

decisions. All activities are put into categories in fiscal words, as per their financial assumption, and placed in specific accounts in journals, and ledgers. This is the procedure of bookkeeping, which then allows the data created from bookkeeping to be utilized to produce correct and timely financial statements for the organization. Two key divisions of accounting incorporate managerial accounting as well as financial accounting. Managerial accounting assists people in dealing with their finances…

Words 726 - Pages 3

financial statement Essay

Part 1: Vertical Analysis Income Statement: 1 Trend in Net Income for each period (a) Description Net income experienced a downward trend over two periods (’09 to ’10, ’11 to ’12), the figure decreased significantly from 6.91% to 3.82% and 12.76% to 10.04%. However, the net income shows an upward trend between ’10 and ’11 (from 3.82% to 12.76%). (b) Reasons Net income between ’09 and ’10 has decreased mainly caused by the growth of cost of goods sold (from 35.63% to 36.83% wholesale supply…

Words 4457 - Pages 18

financial statements paper

Financial Statements Jonniece Hayes Account 290 September 30, 2013 Jonathan Gilen Financial Statements Financial statements are key components to a successful business. It is important that a business keep great financial records. Doing so can make or break any company. If a business wants to be successful and profitable, their records need to be up to date and error free. A business should do audits to ensure that every T is crossed and I dotted. There are four basic financial statements. The four…

Words 720 - Pages 3

Financial Statements Essays

Financial Statements Paper ACC/290 There are four types of financial statement reports that are used in every business to help keep track of the financial health of businesses; they are the billing sheet, income statement, retained earnings statement, and the statement of cash flows. Each of the four statements has their own use but rely on the others for information making them all connected in some way shape or form. The balance sheet is one of the four financial statements that are…

Words 755 - Pages 4