Financial Statements Paper
Not what you're looking for?
Please help prepare a paper in which you define the purpose of accounting and identify the four basic financial statements.
Explain how they are interrelated with each other, and why they are useful to managers, investors, creditors, and employees.
Format your paper according to APA standards.
Purchase this Solution
Solution Summary
The solution discusses creating a financial statements paper.
Solution Preview
Four basic financial statements are Balance sheet, Income statement, and statement of retained earnings and statement of cash flow.
Meaning of Balance Sheet:
1. Balance sheet shows the financial position of the company on a particular date usually at the end of the particular financial year. Balance sheet lists the amount of fixed assets, current assets, investments made by the company, amount of shareholders' equity, long term debt and current liabilities of the company.
2. Income statement shows the financial results of the company for the particular financial year. It shows the profit or loss made by the company during the particular financial period (usually one year). It shows the operational efficiency of the company. If the income statement shows net profit, then it indicates that the management is efficient in running the business and if the income shows the loss then it indicates that the company did not do well in the said period.
3. Statement of retained earnings shows the amount of profit accumulated during previous years which are retained in the business, the amount of profit earned during the particular financial year and the amount of dividend paid during the year. It is the part of shareholders' equity.
4. Statement of cash flow shows the movement of cash from operating, investing and financing activities of the company. It shows the short term solvency of the company. It shows the company's flow of cash both inflow of cash and cash equivalents and outflow of cash and cash equivalents.
All these financial statements are important of the organization and ...
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.