Financial Statements - Accountants and accounting...

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Accountants and accounting departments of companies must communicate with users of the financial information they produce. This information includes balance sheets, income statements, retained earnings statements, and statements of cash flow. This paper will discuss and explain each of these financial statements and what users such as creditors, managers and investors purposes are for each piece of information. Balance Sheet Balance sheets are used to report company assets and liabilities within a specific period of time. A company’s assets are what it owns; liabilities are what a company owes. Creditors use a company’s balance sheet to determine the risk of whether or not they will be repaid. Managers use balance sheets to determine the relationship between debt and stockholder equity (the portion that depicts the capital gained from investors in exchange for stock) to figure whether there is a good proportion of debt and stock financing. (University of Phoenix, 2003) Income Statement
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