Financial Statements
Financial Statements
Tyrece Montgomery
Axia College
It is important for all companies, both big and small, to have an accountant. This accountant will have many different aspects to his or her job that will help to make it an effective one. Some of the things that an accountant must know are the different statements that need to be completed to show the companies financial status. Listed below are financial statements that accountants use to establish all of a company's finances.
Balance Sheet
A balance sheet is a financial statement that reports the assets, liabilities and stockholders' equity at a specific date. These claims are divided into two categories: claims of creditors and claims of owners. In order for a balance sheet to be accurate, all assets must be equal to the claims of the assets. The assets are recorded onto the balance sheet are the resources owned by a business. The liabilities that are recorded on the balance sheet are the debts and obligations of a business. These liabilities represent claims of creditors on the assets of a business.
Once a balance sheet is completed, it is then reviewed for the amount of debt and the amount of stockholders' equity. Managers than use the balance sheet to see if the inventory is sufficient to aid the future sales and to see if cash on hand is enough if it is needed immediately.
Statement of Cash Flows
The statement of cash flows is a financial statement that gives information about receipts and payments for a set time period. The statement also reports the cash effects of a company's operating, investing, and financial activities. The statement also shows the net increase or decrease during and at the end of the set period.
Once the statement of cash flows is report is finished, it is used to compare the amount of cash provided...
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