Finaancial Statements Paper

In: Business and Management

Submitted By neon4699
Words 942
Pages 4
The purpose of accounting is to be able to communicate a company’s financial information to the business world. To accomplish this, the accounting world uses financial statements. There are four different financial statements, although they are interrelated. Internal users and external users take information from these statements to make various business decisions.
Income statement is the first financial statement to be completed in the reporting process. An income statement shows how profitable a business is during a specified period by comparing revenues and expenses. If revenue is greater than expenses then a business has a net income. If the business expenses are greater than revenue then it has a net loss. Income statements only show the amount of money gained or lost from revenue and expenses. Therefore, the money a business gets from investments from the owner, or the money lost from drawings from an owner, are not on the income statement. This is so these transactions do not confuse the user on how well the business is doing.
Owner’s equity statement is the second financial statement to be completed. The reason being is you need the net income, or net loss from the income statement to complete this statement. This statement reports the change in owner’s equity over the same period of time as the income statement. Owner’s equity is the portion of the company’s assets not claimed by creditors. You begin this statement with the amount of owner’s equity from the start of the period. Then you add the amount of investments, and the net income from the income statement. If the business had a net loss on the income statement you would subtract it from the beginning owner’s equity. After you make your additions, you make your subtractions from owner’s equity, for transactions such as drawings. Once all of your additions and subtractions are made,…...

Similar Documents

Financial Statements Paper

...Financial Statements Paper Thomas Hastings ACC/290 April,11,2012 Rolland Roup Financial Statements Paper In the accounting world there are four different financial statements. These financial statements provide a very wide amount of information which is very valuable information to internal and external users in many different types of companies. These four financial statements are the balance sheet, income statement, retained earnings and statement of cash flow. These four financial statements form the backbone of financial accounting. (Kimmel, Weygandt, & Kieso, 2009) Each of the four financial statements has its own use’s within accounting and each provides different and very crucial information to its proper user’s. The first financial statement is the balance sheet, the balance sheet shows a picture at a point in time of what your business owns (its assets) and what it owes (its liabilities). The second financial statement is income statements show how successfully your business performed during a period of time, it reports revenues and expenses. The third financial statement is retained Earnings are used to indicate how much of the previous income was distributed to you and the owners of your business in the form of dividends, and how much was retained in the business to allow future growth. The fourth financial statements is statement of cash flow is to show where your business obtained cash during a period of time and how that cash was used. (Kimmel,...

Words: 715 - Pages: 3

Financial Statements Paper

...Financial Statements Paper The 4 fundamental monetary reports are the balance sheet, income Statement, retained earnings statement, as well as statement of cash flow (Kimmel, Weygandt, Kieso, 2011). The balance sheet is used to show an idea of what a business has (Kimmel, Weygandt, Kieso, 2011). The balance sheet reports the quantity of assets and claims to assets for a time period (Kimmel, Weygandt, Kieso, 2011). Assets are products the business has that might be used if required to get money. The claims to assets are either lender or proprietor. The lender could be the person or business that's using the asset as security to a debt. As soon as debt is paid the lender releases asset returning to proprietor. The Income statement is used to report the fiscal health of the business in a particular time period (Kimmel, Weygandt, Kieso, 2011). The income statement offers the revenues as well as costs in the time period (Kimmel, Weygandt, Kieso, 2011). The income is the revenue funds, and expenditures are the outgoing funds. The retained earnings statements indicate how earlier revenue was distributed to proprietors in the shape of dividends (Kimmel, Weygandt, Kieso, 2011). The retained earnings statement report provides the company the capability to evaluate just how much are received and also the modifications to the earnings. The timeframe used to compute retained earnings statement will be exact same as described on the income statements. The statement of cash flow states......

Words: 789 - Pages: 4

Educational Mission Statement Paper

...EDUCATIONAL MISSION STATEMENT PAPER Natalie Farquharson University of Phoenix NUR/588 Developing and Evaluating Education Programs Kelly Crum March 05, 2013 EDUCATIONAL MISSION STATEMENT PAPER The purpose of a mission statement is to represent the overall goal of the organization, to guide the pathways to which they will practice, and provide an overall framework for continued practice. While most mission statements will differ, the overall goal is for continued success and best outcomes for that organization. Nursing Philosophies of an organization states thought on what is believed to be truthful about the specific profession and usually a theorist who best represents the goal and mission that the organization desires to achieve and maintain while practicing optimal patient outcomes. During my career, I have worked for a number of different hospitals and long term care facilities. Currently, I am employed full time at Memorial Healthcare System (MHS) in Florida who serves a large population in the South Florida area. According to Memorial Healthcare System’s philosophy, their nurses “reach their goals through professional collaboration and framework with peers and in partnership with patients and the community”. The nursing philosophy of the organization is evident in daily practice. “Nurses are involved in the art of nursing and are totally committed to producing the best care possible with the highest quality outcomes while showing and maintaining......

Words: 749 - Pages: 3

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Nancy Negron ACC/561 Accounting April 15th, 2013 Tom Myers Financial Statement Differentiation Paper In accordance with the United States Securities and Exchange Commission (SEC) the financial statements are as easy to read as a nutrition label (US Securities and Exchange Commission, 2007). There are basic financial statements such as the income statement, which show how much revenue a company acquired during a specific period, the bottom line of company earnings or losses (Kimmel, Weygandt, & Kieso, 2009). The balance sheet, which shows the company’s assets (things that the company owns that have value), liabilities (money that the company owes) and shareholder’s equity (the capital or net worth that belong to the shareholders or owners) (Kimmel, Weygandt, & Kieso, 2009). The cash flow statement, which shows how the company manages the flow of cash in the different business activities such as operating, financing, and investing (Kimmel, Weygandt, & Kieso, 2009). Finally, the statement of equity, which shows any action with the shareholder’s or owners of the company for a specific time, this statement also shows assets and liabilities changes that do not affect the income (Kimmel, Weygandt, & Kieso, 2009). These statements are related to each other because more than one input of the statements is needed in other statements. For example, any changes on the assets or liabilities in the balance sheet are......

Words: 800 - Pages: 4

Financial Statement Paper

...Financial Statements Paper Twanda Anderson ACC / 280 Principles of Accounting Michael Ford August 15, 2011   Financial Statements Paper Many people assumed that accounting is just adding and subtracting numbers but financial accounting has several important parts for a business to be profitable. In the accounting process there are significant parts and these parts provide excellent information about the company’s finances that identify, record, and communicate its finances. The financial statement has four parts and how these parts interrelate to each other they are the Income statement, Retained earnings statement, Balance sheet, and Statement of cash flows to help the company provide relevant financial data for internal and external users. According to Weygandt (2008), Accounting consist of three basis activities and it is an information system that identifies, records, and communicates the economic events of an organization to interested users. Accounting has two primary qualities that make its information useful for decision making and they are relevance and reliability. The primary purpose of accounting is to provide a financial report showing its performance during a specific time period usually for a year. These reports are made available for its user’s which are creditors, stockholders, and tax authorities. Accounting is also the financial information that gives an organization/company its understanding of what is happening financially to......

Words: 940 - Pages: 4

Financial Statement Paper

...Financial Statements Paper ACC/290 – Principles of Accounting I May 14, 2010 Adael Acosta Assessment • Individual Assigment: Financial Statements Paper Write a 700- to 1,050-word paper in which you do the following: o Identify the four basic financial statements. o Describe the purpose of each of the four financial statements. o Discuss how the financial statements would be useful to internal users, such as to managers and employees. o Discuss how the financial statements would be useful to external users such as investors and creditors. Format the paper consistent with APA guidelines. Abstract Accounting is a valuable service function designed to provide accurate and timely information to internal and external stakeholders. Those stakeholders rely on four primary financial statements: the income statement, the capital statement, the balance sheet, and the statement of cash flows. Naturally, you begin by studying those four financial statements and the accounting processes that lead to their creation. Those processes include recording financial transactions in journals and then posting to the general ledger. Financial Statements should be defined as journal entries. These entries tell a story about the daily accounting practices and they project the general assets and liabilities of any company. Journal entries must be consistent and must be entered on a regular basis. Investing in reliable accounting software would be a wise decision for any......

Words: 931 - Pages: 4

Financial Statement Restatment Paper

...Financial Statement Restatement Paper ***** ****** ACC/537 January 13, 2014 Financial Statement Restatement Paper MicroStrategy, Inc. went public in June 2008. It is a software company that had been identified as, “a successful, growing company with positive net income” (Krishnan & Mintz, 2007). Like many managers, the managers at MicroStrategy, Inc. wanted to make a quick profit by using aggressive accounting techniques that artificially boosted revenues, inflated earnings, and raised the stock price of shares. The stock price rose from $20 to $333 in one year after the IPO. The company announced in March 2000, that they were planning to restate financial results for the fiscal years 1998 and 1999 (Krishnan & Mintz, 2007). The company needed to restate its financial statements due to improperly applying early revenue recognition in fiscal periods. The company had been recognizing revenues earlier than what was allowed under GAAP. The company would hold open contracts that had been signed by customers after the close of the quarter until the company obtained the desired quarterly financial results, the company would undersign the contracts and give them an effective date that was in the last month of the previous quarter (Krishnan & Mintz, 2007). The restatement of MicroStrategy, Inc’s financial statements reduced the companies combined revenues for the years 1998 and 1999 to $247 million down from $312 million. About 83 percent of this change was......

Words: 534 - Pages: 3

Financial Statement Restatement Paper

...Financial Statement Restatement Paper Justina Kabanuk University of Phoenix ACC/537 Financial Accounting Steven Hall July 5, 2010 Financial Statement Restatement Paper Financial statement users depend on accurate financial statements from corporations to make proper decisions in regard to financial activities. In rare situations, financial statement users find that the information they had depended on for their decisions was not accurate. Companies required to restate their financial reports risk losing the trust and confidence of the financial statement users. Overstock.com is an example of a company that knows the effects of restating their finances all too well. Following is an overview of the issues that led to the most recent restatements of Overstock.com’s financial statements. Additionally discussed are the accounting principles involved, the effect of the errors and changes to the financial statements, and the effects on the company’s stockholders. In October 2008, Overstock.com publicly announced that it would be restating financial results for a five-and-a-half-year period. The needed revisions to Overstock.com’s Q1 2003 to Q2 2008 financial statements were estimated to reduce revenues by......

Words: 845 - Pages: 4

Finiacial Statement Paper

...Financial Statement Paper Piertus Esperience ACC/290 February 4, 2014 Tim Callaghan Financial Statement Paper There are four financial statements that are prepared to represent the financial position and operations of a company. The four financial statements are income statement, statement of retained earnings, balance sheet, and statement of cash flows. The income statement reports the revenue, expenses, and results of operations for a particular company in a specified period of time. The difference between the revenues and expenses is identified as the net income or net loss. The statement of retained earnings is the income of the business that has not been paid out in dividend. Over a period of time, retained earnings will either increase or decrease. The balance sheet states the economics resources owned by an entity and the claims against those resources. The balance sheet reflects the fundamental accounting equation, assets equals’ liability plus owner’s equity. The statement of cash flows shows how cash is generated and expended in a period of time however, that is not the same as income. The statement of cash flow has three sections which are the operating activities, investing activities, and financial activities. The purpose of financial statement is to allow businesses to establish themselves to be financial stable over a period of time. Financial provides information, performance changes of enterprise; that is useful......

Words: 802 - Pages: 4

Financial Statement Paper

...Financial Statement Paper xxxxxx ACC/290 January 29, 2013 Dr. Norris Dorsey Financial Statement Paper This week’s individual assignment is to identify the four basic financial statement reports used in basic accounting principles and concepts. It also is to describe the purpose of these four reports and how they would be of use to both managers and employees as an internal component. It is also to describe the external use to investors and creditors. The four monetary financial statements are the balance sheet, income statement, capital statement as well as the statement of cash flows. A balance sheet shows what a business has. A balance sheet is a statement of business or institution that lists the assets, debts, and owner’s investment as of a specified date in time. An income statement is a summary of a management's performance as reflected in the profitability (or lack of it) of an organization over a certain period. It itemizes the revenues and an expense of past that led to the current profit or loss, and indicates what may be performed to improve the results. The capital statement is wealth in the form of money or assets, taken as a sign of the financial strength of an individual, organization, or nation, and assumed to be available for development or investment (businessdictionary.com). In layman’s term money invested in a business to generate income. The statement of cash flow reports the money received as well as used during a specific time frame. The......

Words: 754 - Pages: 4

Financial Statements Paper

...Financial Statements Paper University of Phoenix Principles of Accounting 280 David Fewkes September 13, 2010 Financial Statements Paper Accounting consists of three basic activities-it identifies, records, and communicates the economic events of an organization to interested users (Weygandt, p. 4). Managers and Chief Executive Officer’s use financial statements to promote sustainability and track financial decline. These statements are also used by auditors, creditors, and the Securities and Exchange Commission. Stock investors rely on accurate accounting data before purchasing stock. These investors want to make sure they are investing in a profitable company and it has a minimum risk level. Listing erroneous information can create a negative outlook on any company. The income statement reports the success or profitability of the company’s operations over a specific period of time (Weygandt, p. 21). This statement shows how money has been earned and it also lists how much a company has lost and profited from regular business activities. This statement lists detailed information pertaining to expenses and revenues. Knowing how much an employer is spending on salaries can assist him or her in projecting future expenses. Companies are required to provide a DUNS number when they apply for grants and credit. A company’s credit worthiness is based on the financial condition of the company. The balance sheet lists the company’s assets,......

Words: 766 - Pages: 4

Financial Statement Paper

...Financial Statement Paper The basics of accounting are not rocket science. If you can follow the directions of a recipe, then you can learn the basics of accounting. This paper will help you gain a basic understanding of financial statements. Identify the four financial statements Financial statements show you where a company’s money came from, where it went, and where it is now. There are four main financial statements. They are: balance sheets; income statements; cash flow statements; and statements of shareholders ‘equity The Purpose of Each Statement Balance sheets show what a company owns and what it owes at a fixed point in time. A balance sheet provides detailed information about a company’s assets, liabilities and shareholders’ equity. Assets are the things a company owns that have value. These things can either be sold or used by the company to make products or provide services that can be sold. An example of asset can include plants, trucks, equipment and inventory. They can also include, cash, patents and investments that the company made. Liabilities are amounts of money that a company owes to others. This can be money borrowed from a bank, money owed to suppliers for materials, payroll owed to employees, environmental cleanup costs, or taxes owed to the governments. Shareholders’ equity is sometimes called capital or net worth. It’s the money that would be left if a company sold all of its assets and paid off all of its liabilities. This leftover money......

Words: 579 - Pages: 3

Financial Statement Paper

...Financial Statements paper . ACC/290 September 22, 2011 Financial Statements paper Accounting is an action needed by companies in business. Without accounting and the knowledge of the inner workings of financial statements, a business is doomed to failure. In accounting there are four basic financial statements used for an array of reasons. The first financial statement in accounting is the balance sheet. The balance sheet is used to represent an illustration at a point of what a business owns and owes; these are also known as assets and liabilities (Kimmel, Weygandt, & Kieso, 2011). The next statement used is the income statement. The income statement displays just how successful one’s business performance is during a certain period. The income statement basically shows the revenues and expenses of any business (Kimmel, Weygandt, & Kieso, 2011). After the income statement there is the retained earnings statement. This statement indicates how much of a business’s previous income is distributed to owners by way of dividends. It also shows how much income was retained within the organization to allot for future growth (Kimmel, Weygandt, & Kieso, 2011). The last of the four basic financial statements is the statement of cash flow. The statement of cash flow is used to indicate where a business obtained their cash during a period. This statement also shows how the obtained money is used over a particular period (Kimmel, Weygandt, & Kieso, 2011). These......

Words: 824 - Pages: 4

Financial Statements Paper

...Financial Statements Paper Brandy Nixon ACC/290 11/15/2011 Annette Anigwe Financial Statements Paper There are four basic financial statements that are used to record various transactions of the day-to-day through the year-to-year activities in a company. There is the income statement, the retained earnings statement, the balance sheet, and the statement of cash flows. There is a specific use for each one of these statements, and they all work together to show what is going on within a company. These statements also help the internal users, such as the managers and employees, in many ways. These statements also help the external users, such as the creditors and investors, in many ways. Each statement, their use, and how they help the internal and external users will be explained in the following. Four Basic Financial Statements: When looking at the income statement you will see a list of expenses that show what has been spent within a certain time frame. The main expenses that are Revenues and Expenses, these are broken down more in depth to explain where the money is going. An income statement is what a company uses to report if a company is failing or successful. In other words tells how a company is doing by showing the operations of the company in a period, whether it is a day-to-day period or a year-to-year period. When looking at the retained earnings statement, there is a chart with the retained earnings, with the beginning of the time period and retained......

Words: 866 - Pages: 4

Financial Statement Paper

...Financial Statement Paper Barbara Watson ACC/290 February 1, 2012 Courtney Wilson Financial Statement Paper In any business or organization that is established there has to financial records kept consistently to be as follows; (1) compliant with federal business laws, (2) in accordance with Internal Revenue Service, and last no fraudulent reporting in profit gains. In this paper I will attempt to explain the four basic financial statements, describe their purpose, and the usefulness to both external and internal users. The four basic financial statements of any company or organization are as follows; (1) the income Statement, (2) retained earnings, (3) balance sheet, and (4) statement of cash flow. These statements are usually prepared at a specific time of the year, either on a monthly, quarterly, or yearly basis (Lewis, 2009). . The Income Statement basically shows the fees earned minus operating expenses to show if the company o organization is profitable. The Income Statement uses what we call a matching concept, which is, seeing if the expenses are matched with the revenue that is generated in the same time period as the expense. If the records show that the earning fees are more than the operating expenses, then the company or organization has definitely generated a net profit. However, if the operating expenses are greater than the earning fees than we can consider that company has a net loss The Retained Earnings Statement provides information......

Words: 880 - Pages: 4

Read More.. | لقاء تامر حسني في برنامج صاحبة السعادة الجزء الثاني 2018 HDTv لقاء تامر حسني في برنامج صاحبة السعادة الجزء الثاني توك شو مشاهدة وتحميل حلقة النجم تامر حسني الجزء الثاني مع إسعاد يونس في برنامج صاحبة السعادة كاملة اون لاين وتحميل مباشر | My Friend Is a Magical Girl