Week 1 CheckPoint Financial Statements

Week 1 CheckPoint Financial Statements - A retained...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Keeping accurate records is the key to making sound decisions in accounting. Sometimes we forget things that are bought or money made and that is the main purpose for keeping accurate books. A balance sheet, also known as a statement of condition, is used to keep records. Its records show the businesses assets, liabilities and net worth with specific dates in mind. Companies balance accounts generally on a weekly or daily basis, but most importantly companies do a “monthly close” which involves balancing and reconciling accounts. A tool also used is income statements, which are just financial statements depicting a businesses income and expenses over time, typically over a year. Many stock holders depend on these reports so they can evaluate whether the shares they own have equity or not, this is called stockholders equity.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: A retained earnings statement is a report informing the company of its profits and losses in a format that is broken down so that the causes of the individual profits and losses can be seen. Lastly the statement of cash flows is used to show how and what the companys money is spent on and liabilities the company has. From the report the company can also determine what assets they have and how much they are worth. Companies depend on these forms to survive. From the statements a company can predict how well business will be in the future and with inaccurate information good financial decisions can not be made. Many of the statements mentioned can be considered comparative statements because the data of one statement should compliment the data of another....
View Full Document

This note was uploaded on 01/24/2012 for the course ACC 220 ACC 220 taught by Professor Black during the Spring '11 term at University of Phoenix.

Ask a homework question - tutors are online