Explore BrainMass

Interrelationships in accounting

Please describe the interrelationships between

1. Income statement
2. Statement of Changes in Stockholders equity
3. Statement of cash flow
4. Balance sheet

Solution Preview

Accounting is the means by which information about an enterprise is communicated and, thus, is sometimes called the language of business. Costs, prices, sales volume, profits, and return on investment are all accounting measurements.
Financial Statements is designed primarily to assist investors and creditors in deciding where to place their scarce investment resources. It is also used to help management to know the performance of organization.
Financial statements are useful tools for evaluating both profitability and liquidity. Used separately, or in combination, the income statement and balance sheet help interested parties to measure a company's current financial performance, and to forecast its profit and cash flow potential. Accountants summarize this information in a balance sheet, income statement, and statement of ...

Solution Summary

Accounting's parts of noted.