Financial Statment

In: Business and Management

Submitted By diagodasexyman
Words 587
Pages 3
One of the most important documents or tools for an accountant is a balance sheet. A balance sheet is also referred to as a “statement of financial position”. The balance sheet is represents a companies financial situation at the end of the year. A balance sheet is basically a document that shows the breakdown of the entire companies, profits, losses, investments, and expenses with variable branches of each of the categories. A balance sheet is divided in three sections assets, liability and shareholder equity. The balance sheet will show what the company owns, their debts, the price of inventory, and how much money a company has.

An income statement also knows as a “profit and loss statement” is another a vital part of a company’s development. The income statement is a financial statement that gives measurements of a company’s financial performance over a certain accounting period. The performance of the company is measured by giving an outline of how the business incurs its revenues and expenses. The statement will include net profit and losses over a specific accounting period.

A retained earnings statement is not used by every company, but large corporations find it a very useful tool for success. The retained earnings statement shows the amounts and changes that have been retained by its earning during an accounting period. Retained earnings are the sums of a company’s profits, after dividend payments are settled since the company’s start. Retained earning display what a company did with its profits for an accounting time period. The retained earnings are the amount of profits the company has reinvested in the commerce since it started.

The statement of cash flow shows you how much cash was put in and pulled out of the company during a specific accounting period. The whole point of a statement of cash flows is to have documentation of cash receipts…...

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