Acc/280 Week 1

Financial statement paper

ACC/280

April 21, 2012

In order to have a successful business, you will need to implement the backbone of it all, and that is accounting. Accounting is not new to any type of organization. Accounting has many purposes, its main purpose is to provide crucial information in able to make a difficult decision. Accounting provides a financial image in business activities and is also use to show investors a financial report that shows the company to economical performance. The illustration to the investors is to see if the company is generating revenues or is being hit on a financial burden.

In accounting have four different financial statements. First one is income statement, balance sheet, cash flow statement, and statement of changes in owners equity. All of these four statements mentioned are monitored on a monthly basis to let the organization know about the financial stability they are having. All of these statements can help business operate in a fast pace in able to avoid upcoming disasters.

The income statement shows the revenues and all expense and resulting net income or net loss of a company for a particular period of time (2007, page 21). Income statement actually reports when the company is bringing high profits or loss revenues. Balance statement gives a full list of the company’s assets and responsibilities. This will demonstrate the position of the business in a financial point of view. Cash flows statement demonstrates if the company is earning and spending their money it can be in a use of cash flow or any other type of sources the company is using. The statement of changes in an owner’s equity demonstrates clearness if there are more than a few discrepancies and if changes made in the owners equity from one grace period to the next. These specific types of statements should be used as a detector to inform the company of any initial danger that is up ahead and should give future investors with critical information to...