Financial Statement Paper

In: Business and Management

Submitted By Dublis69
Words 824
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 statements are meant to be understood not only by accountants but also by people who have a moderate wisdom of business and economic activities. If individuals are willing to learn and study this information with diligence, it can be used as a powerful tool toward business success (Mapsofworld.com, 2011).
People who use financial statements come from both inside and outside of an…...

Similar Documents

Financial Statement Differentiation Paper

...ACC - 561 Financial Statement Differentiation Paper Financial statements provide crucial information to management, investors, and creditors. These statements include four documented forms cash flow statement, balance sheet, retained earnings, and income statement. The information contained in the reports provides a detailed picture to the condition of any business. A business evaluation containing all four documents is essential to form an accurate forecast in past and future objectives. Each document allows creditors, investors, and managers’ ability to further understand the financial workings of an individual company. Balance Sheet A balance sheet shows the dollar value at a specific time of the assets and liabilities of the company. The formula for this is Assets = Liabilities + Stockholders Equity. Assets are any resource in which a company posses such as cash, equipment and property. Liabilities are shown as amounts or payables owed to the owner or creditor. Balance sheets for most companies are available to the public. By publishing this report lenders and investors can review the data and decide whether the company is worth the investment. Both investors and lenders can also determine if the company has the ability to repay a debt (Kimmel et al., 2009). Income Statement The income statement shows if a company has reported a profit or loss for a specific period. This statement is also referred to as a profit and loss statement...

Words: 594 - Pages: 3

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Nancy Negron ACC/561 Accounting April 15th, 2013 Tom Myers Financial Statement Differentiation Paper In accordance with the United States Securities and Exchange Commission (SEC) the financial statements are as easy to read as a nutrition label (US Securities and Exchange Commission, 2007). There are basic financial statements such as the income statement, which show how much revenue a company acquired during a specific period, the bottom line of company earnings or losses (Kimmel, Weygandt, & Kieso, 2009). The balance sheet, which shows the company’s assets (things that the company owns that have value), liabilities (money that the company owes) and shareholder’s equity (the capital or net worth that belong to the shareholders or owners) (Kimmel, Weygandt, & Kieso, 2009). The cash flow statement, which shows how the company manages the flow of cash in the different business activities such as operating, financing, and investing (Kimmel, Weygandt, & Kieso, 2009). Finally, the statement of equity, which shows any action with the shareholder’s or owners of the company for a specific time, this statement also shows assets and liabilities changes that do not affect the income (Kimmel, Weygandt, & Kieso, 2009). These statements are related to each other because more than one input of the statements is needed in other statements. For example, any changes on the assets or liabilities in the balance sheet are...

Words: 800 - Pages: 4

Financial Statement Paper

...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...

Words: 940 - Pages: 4

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Set Jardine Acc 561 Financial Statement Differentiation Paper Financial statements are prepared by every public company according to the generally accepted accounting principles adapted by the United States to ensure accounting accuracy within the investment community. These accounting standards are used to prepare the balance statement, the income statement, the shareholders’ equity statement, and the cash flow statement. This paper will discuss the differences between each of these statements. Balance Sheet Shareholders’ equity, liabilities, and assets are items listed on the balance sheet. Assets are the items that the company owns that have value. Liabilities are debts that the company is obligated to pay. Shareholders’ equity is the net worth of the company. The balance sheet is an overview of the company’s accounts during the financial period depicted on the statement. Income Statement The income statement is the company’s statement of profit and loss. This statement will show the company where money was either gained or lost during operations. There are several versions of the income statement, depending on the size of the company. Generally, though, the sections in the income statement consist of revenue, cost of goods sold, operating income minus expenses, pretax income, extraordinary items, income available for common stockholders, adjusted net income, and earnings per share. Cash Flow Statement...

Words: 704 - Pages: 3

Financial Statement Renstatement Paper

...Running head: FINANCIAL STATEMENT RESTATEMENT Financial Statement Restatement Paper Financial Statement Restatement Paper Companies must often restate their financial statements to address certain issues that have occurred within the company including changes in accounting principles, changes in accounting estimates, changes in the reporting entity, and errors in their financial statements. “The FASB classifies changes in these categories because each category involves different methods of recognizing changes in the financial statements” (Kieso, Weygandt, & Warfield, 2007, p. 1153). Zynga is the social gaming company responsible for games including Farmville and Mafia Wars. In August of 2011 the company was faced with restating their financial statements for the first quarter of that year due to the detection of certain errors regarding their stated deferred revenue balances. Restatement On August 11, 2011 Zynga, “restated Q1 revenue to reflect an accounting error in its original IPO registration. The new Q2 revenue figure is $242.89 million, which represents more than a 3% increase over the previously-reported figure” (Primack, 2011). Zynga stated that they initially stated their most current estimate for paying players for the current period. However, they did not adjust their ending balance in the account deferred revenue to reflect estimates for the related sales of prior periods. The company determined that ASC 250 required this adjustment of the ending...

Words: 738 - Pages: 3

Financial Statement Paper

...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...

Words: 774 - Pages: 4

Financial Statement Restatement Paper

...Financial Statement Restatement Paper Abstract Restatement of the financials for a company can affect a company tremendously, when it comes to the validity of the company’s financial success. A study was conducted on the company IEC and its financials. For the fiscal year of 2012, the company announced their restatement of their financials. The aftermath of the announcement are discussed. Also, the financial standing, prior to the restatement, is examined. The effects the error had on the company’s shareholders were also determined. On May 1, 2013, IEC Electronics Corp, a public company in the NYSE, (NYSE MKT:IEC) announced that it has filed a current report with the Securities and Exchange Commission (SEC) which it claimed that its consolidate financial statements for the fiscal year, ending September 30, 2012, the quarterly periods during fiscal 2012, and the quarter ended December 28, 2012 were restated due to an error in accounting for work-in-process inventory (IEC To Reinstate Financial Statements, 2013). This error resulted in an aggregate understatement of cost of sales and an aggregate overstatement of gross profit during all such Restated Periods of approximately $2.2 million (IEC To Reinstate Financial Statements, 2013). According to the complaint, on May 1, 2013, IEC announced that it would be forced to restate its consolidated financial statements for its fiscal year ended September 30, 2012, the quarterly periods during fiscal year 2012...

Words: 666 - Pages: 3

Financial Statement Paper

...Financial Statement Paper xxxxxx ACC/290 January 29, 2013 Dr. Norris Dorsey Financial Statement Paper This week’s individual assignment is to identify the four basic financial statement reports used in basic accounting principles and concepts. It also is to describe the purpose of these four reports and how they would be of use to both managers and employees as an internal component. It is also to describe the external use to investors and creditors. The four monetary financial statements are the balance sheet, income statement, capital statement as well as the statement of cash flows. A balance sheet shows what a business has. A balance sheet is a statement of business or institution that lists the assets, debts, and owner’s investment as of a specified date in time. An income statement is a summary of a management's performance as reflected in the profitability (or lack of it) of an organization over a certain period. It itemizes the revenues and an expense of past that led to the current profit or loss, and indicates what may be performed to improve the results. The capital statement is wealth in the form of money or assets, taken as a sign of the financial strength of an individual, organization, or nation, and assumed to be available for development or investment (businessdictionary.com). In layman’s term money invested in a business to generate income. The statement of cash flow reports the money received as well as used during a specific time frame. The...

Words: 754 - Pages: 4

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Name ACC/561 Date Instructor Financial Statement Differentiation Paper Financial statements arrange financial information into statements that prove to be the financial accounting backbone. The income statement, statement of cash flows, retained earnings statement, and balance sheet arrange the expenses, liabilities, revenues, and assets of a company into formats that provide a clear view of different areas of interest. These areas are of interest to the investors, creditors, and management of the company (Kimmel, 2011). All four of these financial statements prove to be of interest to all three financial statement users in multiple ways. The Four Financial Statements Each of these four financial statements provide insight necessary to keep a company fully functional and profitable. An income statement provides a clear view of how successful the performance of a company was within a period of time through reporting the revenues and expenses within that period. The net income, which is determined through use of the income statement, proves to be valuable information in many different areas of financial interest. The statement of cash flows presents where cash was obtained within a time period and how it was used within the company during that time. This shows how the investing, financing, and operating activities of the company effects the amount of cash at the period’s end. To determine the amount of previous...

Words: 852 - Pages: 4

Financial Statement Paper

...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...

Words: 579 - Pages: 3

Financial Statement Restatement Paper

...Financial Statement Restatement Paper ACC537 April 13, 2015 Financial Statement Restatement Paper Most companies in the world use accounting principles to help them manage their cash flows that occur on a daily basis. It would be impossible for large companies to function without having an accounting department that measures all the data and ensures the company is profitable. Every transaction that occurs in the company needs to be recorded in an appropriate account to reflect everything that the company does. With so many transactions that occur on a daily basis, companies are prone to making an error in their accounting practices. Most of the time, the errors that occur are not discovered until a few years down the road. This can have a negative impact on the company because they are reporting incorrect data. In this paper, I will discuss Bridgestone Education Inc and the errors that they found in their accounting principles. I will analyze the accounting principles involved in the error; the effect of errors and changes on the financial statement, and the effect the errors have on the stockholders. In the year 2014, Bridgestone Education Inc released a statement claiming that they are looking into the accounting practices of the previous years because they found an error in the reports. According to “Street insider” (2014), “Management has concluded that there are material weaknesses in internal control over financial reporting, as we did not maintain effective...

Words: 788 - Pages: 4

Financial Statement Analysis Paper

...Financial Statement Analysis Paper Example 1: Dell Computer Dell Inc. Current Year Prior Year 3 Years Ago $ Income Statement Revenue Cost of Goods Sold Gross Profit Percent $ Percent $ Percent 61,494 49,128 12,366 100.0% 79.9% 20.1% 52,902 42,789 10,113 100.0% 80.9% 19.1% 61,101 49,375 11,726 100.0% 80.8% 19.2% R&D Selling General & Administrative Non Recurring Others 661 1.1% 624 1.2% 663 1.1% 7,302 0 0 11.9% 0.0% 0.0% 6,465 0 0 12.2% 0.0% 0.0% 7,102 0 0 11.6% 0.0% 0.0% Operating Income Depreciation Expense Other Income/Expense 4,403 970 116 7.2% 1.6% 0.2% 3,024 852 12 5.7% 1.6% 0.0% 3,961 769 47 6.5% 1.3% 0.1% EBIT Interest Expense Tax Expense Income from Cont Operations 3,549 199 715 2,635 5.8% 0.3% 1.2% 4.3% 2,184 160 591 1,433 4.1% 0.3% 1.1% 2.7% 3,417 93 846 2,478 5.6% 0.2% 1.4% 4.1% Net Income 2,635 4.3% 1,433 2.7% 2,478 4.1% Balance Sheet Cash Short Term Investments Accounts Receivable Inventory Other Current Assets Total Current Assets 13,913 452 10,136 1,301 3,219 29,021 36.0% 1.2% 26.3% 3.4% 8.3% 75.2% 10,635 373 8,543 1,051 3,643 24,245 31.6% 1.1% 25.4% 3.1% 10.8% 72.0% 8,352 740 6,443 867 3,749 20,151 31.5% 2.8% 24.3% 3.3% 14.1% 76.0% Long Term Investments PP&E Net Goodwill Intangibles...

Words: 2254 - Pages: 10

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Jason Raines ACC/561 January 9, 2012 Cathleen Davis Financial Statement Differentiation Paper There are four basic financial statements that help business keep track of what is coming and going on a daily basis. “They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders’ equity” (Beginner’s, 2007). Each one of these statements has it own unique way of showing where the company’s money came from, where went, and where it is now. This is why it is important to have better understanding how each statement can help keep accurate financial records for the business. Balance Sheet A balance sheet is really an easy concept to understand because when it comes to the balance sheet company’s use them to balance out there financials. This financial statement shows a company’s “assets, liabilities, and share holders equity at certain point of time in a business cycle” (Balance Sheet, 2011). There is a simple equation that can describe the balance sheet which is Assets = Liabilities + Shareholder’s Equity, using this equation company’s should be able to keep accurate records of their finances. Although investors, creditors, and management all look at the balance sheet for reassurance it would seem that the creditors would more interested in the balance sheet because creditors can look at the balance sheet and make a determination on whether or not they are...

Words: 1025 - Pages: 5

Financial Statement Paper

...Financial Statement Paper April 14, 2011 Devina Stocking ACC/280 Salil Sharma Financial Statement Accounting is an essential part of the business world today. Accounting “identifies, records, and communicates the economic events of an organization to interested users” (Weygandt p. 4). Accounting shows organizations what is happening financially within the organizations. Accounting shows where the cash is going and where cash is coming from. Accountants analyze and interpret the financial information on the financial statements using ratios and graphs. The information that is being analyzed are comprised into financial statements. The four basic financial statements include; income statement, statement of retained earnings, balance sheet and statement of cash flows. The income statement “presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time” (Weygandt p. 21). The retained earnings statement “summarizes the changes in retained earnings for a specific period of time” (Weygandt p. 21). The balance statement “reports the assets, liabilities, and stockholders’ equity of a company at a specific date” (Weygandt p. 21). The statement of cash flows “summarizes information concerning the cash inflows (receipts) and outflows (payments) for a specific period of time” (Weygandt p. 21). The income statement, statement of retained earnings and statement of cash flows all depict a period of time whereas the balance sheet...

Words: 682 - Pages: 3

Financial Statement Paper

...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...

Words: 824 - Pages: 4