Finanicial Statement Paper

Financial Statement Paper

Marie L. Mata

ACC280

September 5, 2011

Judith Bines Vargas

The purpose of this paper is to define accounting and identify the basic financial statements.

According to the book accounting means the information system that identifies, records, and communicates the economic events of an organization to interested users (Weygandt, p. 4).

Economists develop accounting practices for a practical way to keep agricultural trade records. Some religious books about accounting, such as Islamic book of faith and New Testament of Christian Holy Bible. After a while practically all cultures recognized the mathematical calculation of accounting.

In the business world accounting and financial statement is the way businesses communicate numbers. Keeping accurate accounting records required in today’s business world.

Purpose of Accounting

Accounting provides companies, organizations, and with information needed for positive economic decision making. The main purpose of financial accounting provides financial reports about companies to external groups. External groups include investors, tax authorities, government, and regulatory agencies, and creditors. Internal users of accounting information any individual within the company such as employees and department managers. (Purchasing and marketing). The main goal of a company is to sell goods and services at a good price for the customer and profit for the company. A business must retain plenty profitability and liquidly to continue operations. Company managers need accounting information to conduct daily task to run the company properly. Accurate accounting is important to these individual because he or she makes crucial financial and business decision that affect the company. Another purpose of financial accounting it allows business to set up the results of its reports over a period and determine its value.

The first step in a company is to decide what economic event revel vent to the...