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Unformatted text preview: rmation to users.
Balance Sheet: Communicates the financial position of a business on a certain date, usually at
the end of a month or the end of a year.. Assets= Liabilities + Owner's Equity
• Income Statement: Summarizes the revenues earned and expenses incurred by a business over
a period of time (month, quarter, or year) Revenues - Expenses = Net Income
• Woo • Statement of Retained Earnings (Owner's Equity): Illustrates change in owner's equity
(retained earnings) over a period of time
• Statement of Cash Flows: Illustrates the cash inflows (+) and cash outflows (-) of cash into and
out of a business over a period of time.
o Can have cash inflows/outflows from operating, investing and financing activities
Responsibilities in the Communication Process:
Management is primarily responsible for information presented in the financial statements
Certified Public Accountant is responsible for providing an opinion as the whether the information in the
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