Financial Statements Paper

In: Business and Management

Submitted By justmarried2007
Words 866
Pages 4
Financial Statements Paper
Brandy Nixon
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 earnings at the end of the period. This statement is used to show what amount was that was retained and the reason for it being retained in a period. As a better definition, the retained earnings are what is retained from the net income of a company.
The balance sheet is where reports are added to a chart that shows assets and the claims to the assets in a given period. A balance sheet has…...

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