Basic Financial Statements
ACC/290 Principles of Accountant
An organizations financial statements provide substantial financial information that investors and creditors use to gage a company’s financial performance. Financial statements are also essential to an organizations management because it allows you to monitor gains and loss. This is essential because it lets managements know what direction company needs to move in and what needs to be done to increase and maintain productivity. Making financial statements public, helps gain trust of consumers and can also be used to make companies financial accomplishments public. A properly prepared financial statements should show the organization’s cash flow, any outstanding debts, and the value of the organizations assets. Appropriate financial statements are essential for any public company in order to maintain compliance with government regulations. These regulations are put in place to ensure that no unethical activity is taking place that may cause a negative financial effect on consumers, employees and partners .Appropriately prepared financial statements can show you the cash flow of your business, any outstanding debts, and the value of your assets that may cause a negative financial effect on consumers, employees and partners.
There are four different types of financial statements, each proving information about assets, liabilities, expenses and revenue. The four different financial statements are balance sheets, income statements, retained earnings statements and statement of cash flow.
Balance sheets gives financial overview of a business at a given or specific date in time. A company’s balance she should provide the scope of the financial situation for the entire organization. Income statements specifically reflect profits and losses within a specific period and evaluate management’s performance in relations to profitability. Retained earnings statement describe the changes in a company's retained...