Financial Statements Chapter 4 - Financial statements are...

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Financial statements are seen all over the textbook. The first time readers areintroduced was in chapter one. Horngen’s textbook stated, “financial statements are business documents that are used to communicate information needed to make business decisions” (Nobles, Mattison, & Matsumura, 2014, p. 18). The second time financial statements were grazed over to show the impact of adjusting entries on thestatements. The next couple paragraphs will go over chapter four and explain why financial statements need to be completed in a certain order and what documents they are prepared from.There are three categories that make up the financial statements: income statement, statement of owner’s equity, and the balance sheet. One of the first thingstaught about the financial statements is that they have to be prepared in a certain order. That order is as stated above: income statement, statement of owner’s equity, and balance sheet. An income statement tells a business whether or not they are

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