Gary Washington ACC 201 Module 2 SLP
I have to make three financial decisions based on my own personal financial situation. It takes me forever to do these assignments because I really can’t grasp the concept of what is actually wanted. In the bottom of SLP it asks for my ability to create three financial statements on my own but in the top it tells me to assume that I have developed a complete set of financial statement. I want to do this but I am not sure what to do so I will attempt to get this done because I am surely falling behind so it is better to move forward than to continue to lag behind. If I was to make three decisions the financial statements I would use would be a balance sheet, income statement, and a statement of cash flows.
A balance sheet is a statement of your financial position at a given time. This helps you because at any given time you know exactly where you are with you liability and equity. Knowing those can’t tell you all about your assets. If you have more equity than liability this will give you and income which can be used to run your business. Profitability is a key to a business’s success so watching the balance sheet is very important.
The income statement is a representation of the results of a business’s operations during a period of time. Revenue minus expenses equals net income. Revenue is money that is earned from the product or service. Expenses are outflows or cost incurred to produce the revenue. The income statement would allow me to gauge my profitability and show me where I can make adjustments to be more profitable.
A cash flow statement is a tool to allow me to evaluate my ability to pay my bills. It will give me a break down of all my transactions it will also tell me were my money came from and what I did with it. The information used to construct a cash flow statement comes from the beginning and ending balance sheets for the period and from the income...
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