Acc 380 Financial Statement

Week one Financial Statements

Week one financial Statements

This paper will cover the definition of accounting as well as its purpose and recognize the four financial statements. In this paper, it will also illuminate just how financial statements are correlated with one other, and the important use to investors, managers, employees, and creditors.

Accounting is the provision, measurement, or disclosure of assurance in regards to financial information, which aids the investors, the tax authorities, the managers, and other decision makers make means distribution decisions. Financial accounting is an accounting branch that traditionally has involved methods by which financial info about any business is interpreted, recorded, summarized, communicated, and classified. Accountancy attempts to create accurate financial reports that are useful to regulators, managers, and any other stakeholders like creditors, owners, or shareholders. Bookkeeping is known as the process of day to day record keeping. (A.J Palumbo school of Business administration)

Four financial statements

First, income statement is at times stated to as the earnings statement, operations statement, loss statement, and profit statement. Second is the retained earnings statement, which sums up the modifications in retained earnings for a particular point of time. Third is balance sheet that is use to reports the liabilities, assets, and the stockholders equity of a business at a particular date. The statement of cash flow sums up information in regards to the cash inflows, which is receipts and the outflows that is payments for a particular point of time. Each the financial statement mentioned provides relevant financial data for internal and external users. (Principles of Accounting. p21).

The four basic financial statements are prepared in the sequence. Net income is first to be computed and is required to determine the ending balance in retained wages. The ending balance in retained...