A Financial Statement can be defined as, “Summary report that shows how a firm has used the funds entrusted to it by its stockholders (shareholders) and lenders, and what is its current financial position” (Business Dictionary, 2011). The Financial information is required for various users to make an informed Decision. “The purpose of financial information is to provide inputs for decision making” (Kimmel, Weygandt, Kieso, 2009, Para 1, p. 6). There are four different parts covered in a Financial Statement; those are Balance Sheet, Income Statement, Retained Earnings Statement, and Statement of Cash flow. The assignment will elaborate the purpose of each statement and differentiate its utility for different…
balance sheet of Mendez Company to balance. Mendez’s balance sheet is shown on page 37.…
These statements are the income statement, the balance sheet, cash flow statement, and statement of owner’s equity.…
1. Balance sheet - The balance sheet reveals everything of value that the corporation owns. This includes all Assets, Liabilities, and the Net Worth. The balance sheet can be useful to an internal user such as management and employees by showing where improvement need to be made within the company. Creditors and investor will use the balance sheet to determine if money can be loaned to or invested in the company.…
There are four significant elements of financial management, “There are four basic financial statements. You can think of them as a set. They include the balance sheet, the statement of revenue and expense, the statement of fund balance or net worth, and the statement of cash flows.” (Baker & Baker, Chapter 4, 2011). Financial manager need to have a balance sheet to review or perform an audit so they can see the debt to income ratio for the organization they are financially responsible for. The statement of revenue and expense provide a clear financial outlook of the organizations financial situation during certain time periods. The significance of the statement of fund balance or net worth is to identify cash and property assets of the organization within a year or other period of time. Last but not least the statement of cash flow is proof of all of the profit by the organization during a certain period of time.…
The balance sheet “reports assets and claims to assets at a specific point. Claims to assets are subdivided into two categories: claims of creditors and claims of owners” (Kimmel, Weygandt, & Kieso, 2011, p. 13). Statement of cash flows “primary purpose is to provide financial information about the cash receipts and cash payments of a business for a specific period. To help investors, creditors, and others in their analysis of a company’s cash position, the statement of cash flows reports the cash effects of a company’s operating, investing, and financing activities” (Kimmel, Weygandt, & Kieso, 2011, p. 15).…
The first financial statement is the balance sheet. The balance sheet provides a portrait of the company’s assets and liabilities. The balance sheet is the statement of financial position at a given point (Quick MBA, 2010). The second financial statement, the income statement, reports the revenues, and expenses during the same timeframe as the balance sheet. Revenue is the monies the company is gaining after expenses. The third statement is called the retained earnings statement, which explains changed in retained earnings. The retained earnings are changed by the company’s income and dividends. The retained earnings statement uses information form the income statement, which changes the financial information on the balance sheet. The final financial statement is the statement of cash flows. The statement of cash flows shows where the business obtained cash during a period of time and how that cash was used (Kimmel, Accounting, 3/e).…
In the University of Phoenix Phx Klips Financial Statement and the Income Statement I learned many interesting things. On the balance sheet it gives an overview of how the business assets, liabilities, and equity are distributed at that time. It is an overview but it does not go into great detail, just general information. The income statement reports a company’s net income or net losses for a specific period of time. This is a good way to find out if the company made more revenues or expenses for that period of time. The retained earnings statement shows the amount of net income the company decides to retain; if the company decides to pay out to shareholders…
• The four financial statements share the same information in certain areas of the statement which leads to better understanding a company’s finances. For example, the income statement explains the net income (revenue-expense) and that number increase the ending retaining earning on the Statement of Retaining Earning Sheet. Furthermore, retaining earning is on the balance sheet which helps determining stockholders equity & total liabilities. The ending cash amount on the statement of cash flows gives the beginning cash balance on the balance sheet. This example show how all the financial statements relate to one another.…
Financial Statements – Balance Sheet, Income Statement, Statement of Cash flows, and statement of changes in stockholders’ equity.…
Accounting identifies, measures, records and communicates financial information to users – shareholders, creditors, regulators and other stakeholders via 4 financial statements.…
The final exam consists of 100 multiple-choice questions from the information presented in Chapter 1 through Chapter 13. Each question is worth 2.5 points. This study guide indicates the items you should review before taking the exam. GOOD LUCK!…
LESSON 01 - Finance basics for Managers SECTION 01: FINANCE BASICS -The Key Financial Statements *** The Balance Sheet -Assets: Physical resources that a company owns: Examples: - Land and Buildings - Plant and Machineries - Motor vehicles - Trade Debtors / Accounts Receivables - Investments - Cash…
Many are baffled by balance sheets, or confused by the financial statements of a business entity. This article therefore takes us through the basic terminology and knowledge to enable us understand and interpret effectively financial statements.…
A Balance Sheet is a formal statement that shows the financial condition of the business as of a given date. It reports the resources of the business (assets), its obligations (liabilities), and the residual ownership (capital or owner’s equity). The Income statement, on the other hand, shows the results of the operations during a given time period. It summarizes business activities for a given period and reports the net income or loss resulting from operations. It contains the nominal accounts or the revenue…