Financial Statements Paper

Financial didacticss be enforced to organize accounting instruction such as assets, liabilities, expenses and revenues. There argon four radical types of financial statements. They are income statements, rest sheets, retained earnings statements, and statements of cash flow. Each of the different types of financial statements serves a purpose. Financial statements are useful to both internal users same(p) managers and employees, and to external users like investors and creditors. The income statement lists a stage courses revenues and expenses. It reports plunder income or net loss which is found by deducting expenses such as salaries, rent, supplies, and restitution from revenue. The income statement is useful to internal users because it shows whether or non the business is making money. The income statement will help the managers discover what expenses need to be cut to increase net income, or help to regain a solution to increase revenue. orthogo nal users can use the income statement to determine profitability of a phoner. It shows a companys sales performance and incurred expenses for a plastered uttermost of time (Johnson, 2012). A Balance canvass shows a businesss assets and liabilities at a certain point in time. Assets are what a business owns and liabilities are what the business owes.

The equilibrize sheet reports the balance between the claims of creditors (liabilities) and claims of owners ( argumentationholders loveliness). The equation assets = liabilities + stockholders equity is referred to the basic accounting equation (Kimmel, 2009). The balance sheet lists assets first, which whitethorn include cash, accounts receivable, supplies, equipment, an! d insurance. Then it lists liabilities and stockholders equity. A businesss liabilities may include notes, accounts, salaries, and gratify payable, and unearned revenue. shareowners equity is broken fell into two split: Common stock, which results from sales of new stock shares, and Retained earnings, which is the pottys...If you want to get a adequate essay, order it on our website: OrderEssay.net

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