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Date Submitted: 05/16/2011 08:52 PM
Financial Statements Paper
Roberto E. Reyes
ACC/280
December 7, 2010
Samuel G. Smith
• 5 points – good work. Prepare a 700- to 1,050-word paper yes in which you define the purpose of accounting and identify the four basic financial statements. yes Be sure to explain how they are interrelated with each other, and why they are useful to managers, investors, creditors, and employees. yes
• Format your paper consistent with APA guidelines. yes
Financial Statements Paper
The principal objective of accounting is to provide useful financial information by identifying, recording, and communicating all actions that may affect the business financially.
Everything an organization does, including buying, selling, and the acquirement of funds and interest made from investments will be categorized in financial terms and recorded to an account as an accounting record. Transactions are recorded in account books and are part of the process known as the accounting cycle. Accounting allows companies to maintain historical financial records they may use to evaluate past and present financial information that will be used to determine a company's financial position and produce reports and understanding necessary to make sound financial decisions. yes
Four Basic Financial Statements
Balance Sheets
A balance sheet provides detailed information about a company’s assets, liabilities and owners’ equity. Balance sheets list the properties or assets a company has and also its debts.
Physical property, like company real estate, vehicles, tools, merchandise, including trademarks, and patents. Currency on hand is an asset. A balance sheet displays a picture of a business’s resources, obligations and owners’ equity at the end of the reporting period. yes
Income Statements
Income statements track the profits a business has earned and the expenses it has incurred during that period. These statements also disclose the earnings...