Week 1 DQ 1 - The balance sheet shows profit against debts...

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Week 1 DQ 1 What are the four basic financial statements? What do the different financial statements tell you about a company? Which of the financial statements are most useful? Why? What type of information is provided to managers in your department and how do the managers in your organization use information presented in financial statements? The four basic statements are: balance sheet, income statement, statement of retained earnings and statement of cash flows. The balance sheet in simpler terms shows the resources for credit and the debts to others. The income statement shows the income from sold products is more than the cost to produce them. The statement of retained earnings is what is income that can be reinvested into the company for future growth. The state of cash flows is really self explanatory, it shows the ability to generate sales and the money coming in. I feel the statement which is most beneficial would be the balance sheet.
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Unformatted text preview: The balance sheet shows profit against debts and gives you the overall view of the company money flow. Information provided to managers would be the profit and loss of the department in which they would be in charge of. For example, I work for a retail company. I get statements that show what products are selling well and which ones are not. This allows the company to overstock the "popular" items and buy less of the items not selling. It can also show the mark up on certain products. Products with a high mark up hopefully will sell more than the products with a low mark up. However, one department that may be a little different would be the electronic department. Game systems for example, have very little mark up, but the games for the system have a huge mark up, so if the game system is sold, the consumer needs the games that will show future sales and future profit....
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This note was uploaded on 09/15/2011 for the course ACC 280 ACC 280 taught by Professor Acc280 during the Spring '11 term at University of Phoenix.

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Week 1 DQ 1 - The balance sheet shows profit against debts...

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