Financial Statements

Financial Statements


ACC/290

January 16, 2012

Financial Statements

Accounting is the practice of summarizing, recording, analyzing, and account pecuniary transactions. Accounting plays a vital role in assisting the put across of economic activity in an organization. The financial statements show a great deal about a companys performance with the reporting of accounting activity. In this paper I will notice the four basic financial statements and describe the purpose of each. I will also discuss how financial statements argon reclaimable to internal users such as employees and managers as well as external users such as creditors and investors.
The Financial Accounting Standards instrument panel (FASB) develops the United States standards, referred to as generally accepted accounting principles (GAAP) (Kimmel, Weygandt, & Kieso, 2011). These standards argon rules accountants moldiness use when preparing financial statements. The four main financial statements are balance sheet, income statement, retained earnings statement, and statement of gold flows (Kimmel, Weygandt, & Kieso, 2011).
The balance sheet states the basic accounting equation at a specific time: Assets = Liabilities + Stockholders Equity (Kimmel, Weygandt, & Kieso, 2011).



This equation essential always be in balance; the assets equaling the sum of liabilities and old-hatholders equity. Assets are what a company owns that have value. This could mean products or service that can be sold or used by the company. Assets include physical property, plant, equipment, cash, patents, and trademarks. Liabilities are creditor claims, debts, and obligations a company must pay or settle by transferring assets or services. just about putting green types of liabilities are accounts payable, notes payable, unearned revenues, taxes, salaries, wages, and interest. Stockholders equity is the claims of owners composed of common stock and retained earnings. When the company sells new shares of stock, common stock results; retained earnings is...If you want to get a serious essay, order it on our website: Orderessay



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