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    How are the financial statements related

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    How are the financial statements related (from one to another)? Why do these relationships exist? What is the impact of a miscalculation in the income statement on other financial statements? Explain, give examples and be specific.

    The different bases of accounting are Cash, Accrual and Tax bases. When would you use the Cash basis? Accrual basis? Tax basis? Which one is better? Why? Explain, give examples and be specific.

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    The response addresses the queries posted in 805 Words, APA References

    Finance

    1.

    Financial Statements are the end products of the Financial Accounting Process. It is termed as the anticipation of a business, as it reflects the overall financial condition or valuable information that can be useful for business decisions. Financial Statements are broadly classified into the four basic statements i.e. Balance sheet, Income statement, Statement of retained earning and Statement of cash flows. All the Financial Statements are closely related with each other (Shim & Siegel, 2000).

    Balance Sheet reflects the Company's assets, liabilities and owners' equity at their respective book value. It also indicates the net worth or value of the Company. On the other hand, Income Statement depicts its profitability. In the Company, Income Statement and Balance Sheet are related through the net profit for specified duration of time. Any increase or decrease in net income has an impact over owners' equity in the balance sheet. The net income that a business entity earns over a period of time is transliterated to the equity portion of the balance sheet. It indicates a gain in the owners' claim, against the assets of the Company (Accounting relationship: linking the income statement and balance sheet, 2006).

    In the same way, Income statement, Statement of retained earning and ...

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    The response addresses the queries posted in 805 Words, APA References

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