Financial Statements Paper

Four Financial Statement Instruments Differentiation Process

Thomas L. Lowther III

ACC 561/Accounting

February 13, 2012

Shonda Meadows

Four Financial Statement Instruments Differentiation Process

Business and corporations owners as well as people use important financial tools like financial statements to help him or her to decide on what action to take on business decisions. UOPX graduate student will start of explain the four different types of financial statements of balance sheet, income statement, statement of cash flow, and statement of stockholder’s equity. Second he will explain, which financial statements would be of most interesting to investors of a business and how helpful this information is to him or her make a decision. Next the UOPX student will discuss, which financial statements would be of interest to creditors and how important this information is to that person. Finally he will explain, which financial statements would be of interest to management and how they use this valuable information to make decisions.

UOPX graduate student will start of explain the four different types of financial statements of balance sheet, income statement, statement of cash flow, and statement of stockholder’s equity. The balance sheet shows what a business financial situation looks like at any particular time whether good or bad. The balance sheet compares a business asset to its liabilities and the amount of equity the owner has put into the business as well. The income statement tells and explains to a business in detail about its revenue and expenses the business at a particular period in a business cycle. The income statement shows a business how much money is coming into a business and how much is going out at a particular point of a business. Next the statement of cash flow financial instrument, which shows how much cash is on hand in a business and how ready accessible the cash is if the owner needs it in case of...