...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 business...
Words: 931 - Pages: 4
...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 financial...
Words: 824 - Pages: 4
...Financial Statements Paper Brittany Williams University of Phoenix Principles of Accounting I ACC/290 Kelvin Chang November 26, 2013 Financial Statements Paper In the accounting world, there are four basic financial statements that are normally prepared by profit-making organizations. These are balance sheet, income statement, statement of retained earnings, and statement of cash flows. Each of these statements serves a very important purpose in keeping track of the finances for a company. The balance sheet pretty much shows a company’s current monetary position on an exact date. As the name suggests, it is a quick reference for individuals to visually see how the company is balancing their assets, liabilities, and stockholders equity. How is this important? Well a company’s assets are what resources the company currently has at that specific time. Liabilities are the debt a company owes to other people or companies that are still outstanding. Finally, stockholders equity is what the stockholders claim against the company’s assets. The income statement is what shows the results of the company's operations for a set period of time. The income statement also summarizes a company’s revenues (sales) and expenses quarterly and annually for its fiscal year. In short this is what shows the history of the company’s gains, expenses, and losses which compiled together equals out to the company’s final net income for that time period. This final net figure, as well...
Words: 774 - Pages: 4
...In the following paper, it is discussed how accounting is a strong part of a company. Through research, this paper states the many parts of accounting such as the four basic financial statements and the purpose of accounting. Business is restricted to processes and reports to make decision making with accurate information through the accounting practices of bookkeepers. Through analysis, the following paper, describes a small glimpse of the accounting process and how they relate to each other. Purpose of Accounting The purpose of business accounting is to identify and record activities that will impact the organization or company financially. These activities can include sales, purchases, the interest earned from investments, and acquisition of other capital. Activities like these can be categorized in terms and posted as an accounting record. The accounting cycles typically is recorded in ledgers and journals and is part of the process. Systems and processes are developed by accountants to analyze different transactions. Each transaction that involves the sale of goods and services needs to be recorded in a general ledger which needs to be evaluated and analyze. As they are posted to their specific account, bookkeepers use this function of accounting to help maintain each transaction as debits and credits. Bookkeepers are responsible for specific types of financial activities which are typically used to analyze the value of accrual method of accounting, providing reports...
Words: 843 - Pages: 4
...Financial Statements Paper Accounting information consists several areas of interest for users looking to interact with a business. These areas include assets, liabilities, expenses and revenues. The information reflecting these areas of interest is used to populate financial statements. The backbone of financial accounting is made up of four basic financial statements. These four financial statements are a balance sheet, an income statement, a retained earnings statement, and a statement of cash flows. Users utilize these basic forms to keep track of financial areas of interest in a business such and to make decisions. The balance sheet is used to paint a current picture of what a business owns, or it’s assets. It also paints a current picture of what a business owes, or it’s liabilities. The income statement is used to show just how well or successful a business has done for a certain period of time. In this statement, a businesses revenues and expenses are reported. The retained earnings statement is used to show a couple of key things within a business. First, it is used to show how much previous income was distributed to the owners of the business in the form of dividends. It also shows how much of that previous income was retained in the business to allow for future growth. The statement of cash flows is used to show where a business obtains any cash during any given period of time. It also details how the business used these monies in that specified...
Words: 649 - Pages: 3
...Financial Statements Paper April T. Worriax ACC/280 February 30, 2011 Michelle Turk CPA Accounting Accounting is one key element to any business or company. Accounting consists of four basic financial statements that a business or company will use. The four financial statements are very helpful to managers, supervisors, investors, creditors, and employees. Accounting is an important part of any company because it provides the information needed for sound economic decision making (“Financial Accounting,” 1999-2010). Accounting identifies, records, and communicates the economic events of a company to interested users (Weygandt, 2008). The first financial statement is the income statement. The income statement shows the results of the company’s operations for a certain time. This statement lists revenues first and then the company’s expenses. After the completion of this financial statement an individual will be able to tell if the company is a net income or a net loss. For instance, if revenue is more than expenses, will be a net income, but if expenses are more than revenue, there will be a net loss (Weygandt, 2008). The second financial statement is the balance sheet. The balance sheet shows a company what is currently happening within the company. It helps to see how the company is balancing...
Words: 754 - Pages: 4
...Financial Statements Paper Fantasia Friend ACC/280 April 27, 2011 University Of Phoenix Accounting is the technique through which a person creates a report of business dealings and makes records regarding the fiscal infrastructure of the organization. Three key activities of accounting, determining, documenting, and communicating economic activities, assist bestow the health of this company to external and internal people. The main goal is to determine and document activities which have a fiscal effect on the organization and to assist control, compute danger, and take decisions. All activities are categorized in fiscal words, as per the financial assumption, and placed to a particular account in the journals, and then the ledger. Such is the procedure of bookkeeping. The data created from bookkeeping may then be utilized to produce correct and timely financial statements. The two key divisions of accounting incorporate managerial accounting as well as financial accounting. Managerial accounting assists people deal with finances. It gives inner records to assist people take decisions and predict wants regarding their organization. Financial accounting helps the outer people since it gives economic and financial details for them about whether or not the organization complies with rules, laws, and regulations. To know a company, a person has to understand the figures. The four fiscal reports let a close look at the figures an organization produces. The 4 fiscal...
Words: 755 - Pages: 4
...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 based...
Words: 880 - Pages: 4
...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 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 its...
Words: 940 - Pages: 4
...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 belongs...
Words: 579 - Pages: 3
...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, liabilities...
Words: 766 - Pages: 4
...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 earnings...
Words: 866 - Pages: 4
...Financial Statements Clementine McIntosh ACC/280 University of Phoenix Professor James Hill March 23, 2011 Financial Statements Introduction “The Onscreen Financial Statement converts data into useful and actionable business information. Managers can identify and assess vulnerable areas for one or all of their stores. It helps them to keep pace with daily business activities and mitigate negative month-end impacts.” (Collins, 2011). “In business, accounting and financial statements are the means for communicating the numbers. If you don’t know how to read financial statements, you can’t really know your business.” ((Weygandt, Kimmel, & Kieso, 2008). This paper will address the followings: Define the purpose of accounting, identify the four financial statements, and explain how they interrelate with each other and why they are useful to managers, investors, creditors, and employees. Purpose of Accounting The purpose of accounting is to record, analyze and retrieve critical financial information that is used to determine a company’s financial status and provide reports and insights needed to make sound financial decisions. The purpose also includes identifying and records all activities such as purchases, sales, acquisition of capital and interest earned from investments. These transactions are recorded in ledgers and journals which are part of the accounting cycle. Basic Financial Statements Accounting summarized the results of a firm’s transactions and issues...
Words: 782 - Pages: 4
...Financial Statement Paper Kaitlin Williams University of Phoenix ACC/280-Principles of Accounting Carol Demuth Jun 22, 2011 Financial Statement Paper Businesses today need to run quickly, efficiently, and have smaller margin for error than ever before. To keep up with the fast paced world around them, companies must assure things run as smoothly as possible to have a chance at competing with their competitors. One of the biggest details that have to be correct is the company’s accounting. Getting the numbers right isn’t just important, it’s the reason that a business can make money. Without proper accounting, it would not be possible to know how much money is being made or lost, what can be done to change these things for the better, or even where the money ends up. It is a part of everyday business, and will be as long as people continue to do business. Accounting is utilized to record all of the receiving, sending, and all other transfers of money for a particular company. Think of it like the balancing of a checkbook for an entire business as opposed to a personal bank account. If transactions are not kept up with, money can easily fall through the cracks and companies could lose a substantial amount of it simply by not knowing what the numbers should look like. It would be impossible to know if someone was stealing money from the company, or if a company that business was done with had actually paid its bill correctly. Accounting is more than a necessity, it is...
Words: 914 - Pages: 4
