ACC 201 Chapter 1Wednesday_August_27th

ACC 201 Chapter 1Wednesday_August_27th - Wednesday, August...

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Wednesday, August 27 th Chapter 1 ANSWERS TO QUESTIONS 8. (a) The purpose of the income statement is to present information about the revenues, expenses, and the income of the entity for a specified period of time. (b) The purpose of the balance sheet is to report the financial position of an entity at a given date, that is, to report information about the assets, obligations and stockholders’ equity of the entity as of a specific date. (c) The purpose of the statement of cash flows is to present information about the flow of cash into the entity (sources), the flow of cash out of the entity (uses), and the net increase or decrease in cash during the period. (d) The statement of retained earnings reports the cumulative amount of earnings for a corporation less any dividends declared and paid. 9. The income statement and the statement of cash flows are dated “For the Year Ended December 31, 2008,” because they report the inflows and outflows of resources during a period of time. In contrast, the balance sheet
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ACC 201 Chapter 1Wednesday_August_27th - Wednesday, August...

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