Financial Statements ACC/280 Financial Statements Paper Accounting is an important part to any organization. It communicates the financial state of any organization. Accounting has three basic activities: identify, record, and communicate. There are four basic financial statements which are useful to managers, investors, creditors, and employees. These four basic financial statements are interrelated and consist of: income statement, retained earnings statement, balance sheet, and statement of cash flows.
The statement of cash flows contains the information to show where the business obtained cash during a period of time and how that cash was used. The balance sheet indicates any assets and claims to assets at a certain point in time, the claims are
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
The purpose of the financial statement audit is to ensure the entity being audited is preparing the financial statements in conformance with General Accepted Accounting Principles (GAAP). The information is important to investors, managers, banks,
Financial Statements Paper ACC/280 YOUR NAME University of Phoenix INSTRUCTOR NAME DATE Financial Statements Paper Accounting provides an exceptional contribution to the success of any small or large company. More specifically, accounting assists company owners in their management decisions by providing valuable financial information. Financial accounting is regulated by rules and concepts recognized as “generally accepted accounting principles” (GAAP). The GAAP requires four financial statements which include: the balance sheet, income statement, statement of cash flow, and statement of owner's equity. In this paper, the purpose of accounting and the four financial statements and how they correlate with each other will be discussed.
What are the four basic financial statements? According to our textbook Financial Accounting, the four basic financial statements are income statement, a retained earnings statement, a balance sheet and a statement of cash flows. What do the different financial statements tell you about a company? The income statement is about the “revenues and expenses and resulting net income or net loss of a company for a specific period of time.” (Weygandt, J.J., 2008) A retained earnings statement “summarizes the changes in retained earnings for a specific period of time.” (Weygandt, J.J., 2008) The balance sheet will list all of the assets and liabilities that the company has and on a particular date, the stockholder’s equity will be listed as well. The statement of cash flows will summarize what would pertain to the cash coming in “(receipts)” and the cash that would be coming out “(payments)” over a particular period of time.
Financial Ratio Analysis of Dr. Pepper Snapple Group Liquidity ratios for a company help whomever is analyzing the data determine the company’s liquidity. When a company has good liquidity they are able to pay off their short term debt without having to take out any additional financing. We will look at Dr. Pepper Snapple Group’s current ratio for 2009 and 2010. The current ratio is calculated by taking the company’s current assets and dividing it by the current liabilities. It shows how many times the current assets can cover the current liabilities.
The various adjustments that are made to net income in arriving at net cash flow from operating activities. 10. The different tools of financial statement analysis, and how each tool is used, as well as the different names for certain tools of analysis. 11. The different ratios, why/how those ratios are used, and which external user is interested in a certain ratio.
GASB and FASB Similarities GASB and FASB accounting are sets of objectives that proprietorship, government, and not-for-profit organizations follow in preparing financial statements. According to Weygandt (2008, p. 17) “both the GASB and the FASB have established objectives that circumscribe the functions of financial reports.” GASB and FASB objectives show whether a company is making enough profit to pay for expenses throughout the year, allows investors information to decide whether to invest or not, and how well the company budget complied throughout the year. Also, the two accounting standard boards show whether management is complying with all aspects of the objectives. GASB and FASB accounting have differences that individuals need knowledge about to prepare financial statements for government and not-for-profit organizations. GASB and FASB Differences Accountants and individuals, who work in accounting fields, need to know the differences between GASB and FASB.
The Four Financial Statements Merced Villalobos ACC/290 January 11, 2012 Eleazar Pando The Four Financial Statements There are four basic financial statements. The first statement is an income statement that shows the companies’ revenues and expenses. The second statement is a retained earnings statement that shows the amount and causes of changes of retained earnings in a given period of time. The third statement is a balance sheet that shows what the business owns and what it owes. The fourth is a cash flow statement that shows where the business got earnings in a period of time and where that money was used.