Financial Statements Paper

Financial Statements Paper - Financial Statements Paper...

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Financial Statements Paper Financial Statements Paper ACC/362 March 20, 2010 Debbie Bacon By: Shelly Hall 1
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Financial Statements Paper In order for management and stockholders to have a clear understanding of the financial situation of the company, they must review financial statements. This paper will identify and discuss what the statements are as well as how one relates to the other. Four basic financial statements According to Kimmel, Weygandt, and Kieso (2005), the four basic financial statements are the income and retained earnings statement, the balance sheet, and cash flow statement. “An income statement presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time.” (Kimmel, Weygandt, & Kieso, 2005, p. 22). For example, an income statement would show revenue and expenses for a the second quarter of a company. “A retained earnings statement summarizes the changes in retained earnings for a specific period of time.” (Kimmel, Weygandt, & Kieso, 2005, p. 22). Just as the income statement reflects activity for the second quarter (using the same example), so does the retained earnings statement. “A balance sheet reports the assets, liabilities, and stockholders’ equity of a business
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