Acc/531 Week 2 Accounting Research Paper

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Accounting Angel Martinez Acc 11/28/2011 Accounting Accounting requires collecting information and displaying it on statements so that business decisions can be made for the future of a company. The purpose of accounting is to document what the company is spending and what revenue is being collected. Accounting provides a business with correct and documented information on what is profitable and what is negative. Without accounting, businesses can not prosper or make decisions on growth or downsizing. Accounting requires that all transactions be recorded to ensure accuracy when giving financial details to board members, stock holders, and the IRS for tax purposes The income statement posts revenues and expenses. The income statement…show more content…
The retained earning statement reports changes in the interest of the company and retained interest in profits or surplus. This statement typically contains profits and losses, dividends, and issuance of stock. This report is given to the board of directors for a company, issued during a press release, or during a quarterly report earnings statement. The balance sheet tracks the assets, liabilities, and stockholders equity. The assets on the sheet are company holdings. The liabilities are the salaries, accounts payable, and notes payable. The balance sheet is a quick look at the company as a whole at any time which is usually over a specific period of time. The balance sheet should be available on demand for accounting managers to make decisions on where the company stands on dispensable cash and what can be used to purchase materials for inventory. The statement of cash flow tracks all the cash moving in a company during a specific accounting period. There are three categories that are involved in the statement of cash flow. The three categories are operating, investing, and financing. The statement tracks the changes from the starting period of cash flow until the end of the specific period and reconciles the accounting period’s cash

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