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Financial Statments

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Financial Statement Differentiation – Individual Paper Mary Lou Gasca Accounting ACCT/561 March 18, 2013 Moises Rodriguez

Financial Statement Differentiation – Individual Paper Financial statements are tools that people use to evaluate the potential of a business’ organization. There are four types of financial statements for two main types of users (internal and external), which is beneficial, depending on the type of business (sole proprietorship, partnership, and corporation). Regardless of the type of business, financial statements assist in making business decisions for internal and external users. Internal users are the business managers, owners, and an organization’s personnel who contribute to the operations of the business. External users are creditors, investors, and individuals of interest for the business (customers, for example). Financial statements also assist in identifying, depending on the nature of the business, an organization’s resources, profits, debts, business creditability, and financial health of business activities. The four types financial statements, which report financing, investing, and operating activities of a business, include the balance sheet statement, the income statement, retained earnings, and statement of cash flows (Kimmel, Weygandt, & Kieso, 2009). The following will delineate the purpose of four financial statements, and which financial statement is beneficial to the two main types of users. Balance Sheet The purpose of the balance

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