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Discuss the four different types of financial statements. Ex

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Discuss the four different types of financial statements. Explain the information provided by each financial statement and include your responses to the following questions:

Which financial statement, or statements, would be of most interest to investors?
Which financial statement, or statements, would be of most interest to creditors?
Which financial statement, or statements, would be of most interest to management?

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Solution Summary

Discuss the four different types of financial statements. Explain the information provided by each financial statement and include your responses to the following questions:

Which financial statement, or statements, would be of most interest to investors?
Which financial statement, or statements, would be of most interest to creditors?
Which financial statement, or statements, would be of most interest to management?

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The four types of financial statements are: 1) income statement, 2) balance sheet, 3) statement of cash flows, and 4) statement of owner's equity. The income statement lists the company's gross revenues, less their cost of goods sold, which then equates to their gross profit. The income statement then lists all of the company's expenses, in a systematic order (by account). The gross profit less the total of the expenses is the company's net income. The net income then carries over to the balance sheet. The balance sheet lists all of the company's current and long term assets, and their current and long term liabilities. The assets always equal liabilities plus owner equity, and this is the fundamental accounting equation. Both sides of the balance sheet do just that - they balance each other. Assets always equal ...

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