Wk1-Financial Statements Paper

Wk1-Financial Statements Paper - Financial Statements 1...

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Financial Statements 1 Financial Statements Paper ACC 362: Financial Accounting I
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Financial Statements 2 Financial Statements Paper The financial statements are an intricate part to any company. All transactions involved in a company must be documented so, they should be recorded and summarized and these create reports filled with the company’s business information from past, to present and are completed on the financial statements. The four financial statements are the income statement, the retained earnings statements, the balance sheet and the statement of cash flows. My paper will explain the history of the financial statements and the four financial statements. I will also discuss how they interrelate with each other and why they are useful to managers, investors, creditors and employees. In 1971, it was determined that auditor’s needed to state their opinions on financial statements. During that time, the statement of changes in financial position was issued as the APB 19. This statement was used exclusively for all companies who needed to report their operating account status. However, the statement of changes in financial position explained the changes in the working capital and did not focus on the cash flows of a company. Therefore, during the early 1980s, the goal was to focus on the cash flow of a company. By 1984, the Financial Accounting Standards Board (FASB) created the Statement of Financial Accounting
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Wk1-Financial Statements Paper - Financial Statements 1...

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