...Financial Statements Paper ACC/290 Income statements chronicle the gains or deficiencies of a company’s operations over a period of time, by reporting all revenues and expenses. These statements are processed each month, and at the end of the fiscal year. Income statements include definite expenses and revenues. Sometimes these statements are also known as P&L statements or profit and loss. The second statement is known as a retained earnings statement. This is for displaying the beginning balance of retained earnings and adjustments during the course of the year. The statement usually includes beginning balance, net income for the current cycle, dividends disclosed in the current period and ending balance. Balance sheets detail assets and claims to assets at a distinct point in time. Claims of creditors and claims of owners are examples of claims to assets. This particular statement provides a clear outline of the financial standing of the company as a whole. The direct function of a statement of cash flow is to present financial information such as cash receipts and payments during a set point in time. This assists investors and creditors to analyze a company’s financial position.. These statements address a company’s financing, investment and operational activities. Financial statements are useful to managers as these statements are utilized to measure the performance of the organization. Sales and expenses are compared to the income statements...
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...This week I have learned that accounting involves more than recording transactions and balancing accounts. Along with journalizing transactions and adjusting entries, the accounting cycle involves closing entries and preparing a post-closing trial balance. I believe that the most important skills learned in an accounting position is to understand the basic equation of accounting, assets + liabilities + stockholder’s equity. Most accounting goes back to this equation as the basis for balancing accounts when transactions are journalize. The two types of accounting methods used to maintain financial records and prepare reports are the accrual and cash basis accounting. Accrual basis accounting is accepted under the Generally Accepted Accounting Principles (GAAP). This principle states that the accounting transactions are recognized and recorded when the expense or revenue actually occurred, not when cash changes hands (James, 2012). The benefit of accrual basis accounting is expenses and revenues which can be matched as they happen, and much more effective for monitoring cash flow (Epstein, n.d.). Accrual accounting has a more complicated recording process than cash basis accounting which can be a disadvantage when it comes time to pay taxes. Since this accounting method requires that expenses and revenue are recorded right away, the taxes must be paid on the recorded revenue; even if it’s not been paid (Reference For Business, 2012). The adjusting entries are recorded at the...
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...Financial Statements Paper ACC290 January 2, 2013 David Aloyan The main goal of most businesses is to gain profit and have less spending costs all together. If a business is not making money, the owner of that business really has no reason to keep that business open. It is both a waste of time and a waste of money if there is no profit to be made. Many businesses deal with money all the time but how do they really know how much profit was made at a certain point of the year or a certain time of the month. If a business cannot keep track of the money coming in and the money being spent it cannot keep track of whether it is making money or loosing money. Fortunately, we have a solution to keep track of the money our businesses are making and the money our business are spending. Our Solution to our questions about cash flow is financial statements. Financial statements can be beneficial to internal and external sources that are interested in making a business grow. There are four basic financial statements that makeup the backbone of financial accounting. These four statements are balance sheets, income statements, retained earnings statements, and statements of cash flow. A balance sheet is used to show your business’s assets, what your business owns, and the business’s liabilities, what your business owes. It can paint a picture of your business’s finances at a specific point in time. An income statement shows how successful the business was for a certain season...
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...\A Review of Wal-Mart’s Fiscal Year 2013 (FY-13) Financial Statement Two important parts of company’s financial statement are the balance sheet, that list of the company’s asset and liabilities at the end of a period and the income statement that is also referred to as the profit-and-loss statement or statement of revenue and expense because it shows the company’s financial performance during the period ("Income Statement," n.d.). Wal-Mart’s FY-13 financial statement for the period ending on 31 January 2013 shows that they had over $203 million in total assets and provides details of just how that amount came to be. Breaking Down the Income Statement and Balance Sheet Wal-Mart has proven time and time again that it is one of the United States most financially stable company’s. During period of recession and financial shortfalls, Wal-Mart is still able to produce a profit while increasing its assets and providing the stockholders will sound returns on their investment. A brief synopsis of the company’s income statements and balance sheets for 2011 through 2013 tell the story of its performance ("Wal-Mart Stores, Inc. Revenue And Financial Data," 2013). |Income Statement |2013 |2012 |2011 | |Revenue |$469,162 |$446,950 |$421,849 | |Gross Profit ...
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...Reporting Paper Name Team A ACC/ 290 Date Financial Reporting Problem Verizon Communications Incorporated is a multi-billion dollar company. In 2010, the net income for Verizon Communications Inc. and its subsidiaries was over $10 billion (Verizon, 2011). Verizon Communications Inc., like many reputable businesses, makes their financial statements publically available. Although the order of the information is stated as only a suggestion, many companies choose to list their assets in the order listed in the FASAB handbook to keep consistency and to ensure they report all required information. It is the case with Verizon Communications Inc. Verizon Communications Inc. lists its assets in many categories. According to the balance sheet listed on the Verizon Communications Inc. 2010 Annual Report (Verizon, 2011), the assets for Verizon Communications Inc. are classified in the following categories: Current Assets, Plant, property and equipment, Investments in unconsolidated businesses, Wireless licenses, Goodwill, Other intangible assets (net), and Other assets. The order listed by Verizon Communication Inc. is consistent with the Federal accounting Standards Advisory Board Cash Equivalents Verizon registers its assets in the proper order under their current assets. First, on the list are its cash and cash equivalents, which is anything that can immediately turn into cash. Some examples of cash and cash equivalents are money, paper checks...
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...Week Four Individual Paper XXX ACC/290 September XX, 2012 XXX Week Four Individual Paper The current reading supports that commercial accounting and generally accepted accounting principles, strongly advise the accrual basis of accounting versus the cash basis of accounting. The accrual basis of accounting confirms that when transactions alter a business’s financial statements they are recorded during the period that the events happened, regardless if there was an exchange of cash or not. An example of the accrual basis would be businesses who recognize revenues earned, regardless if cash was received or not. The accrual basis also recognize when expenses are incurred, even if cash was not paid. The other potential option to the accrual basis is the cash basis. The major difference between the two accounting basis’, is that under the cash basis a business will record their revenue only at the time that cash is received. Additionally, they record expenses only when cash is received. For these reasons, the cash basis of accounting is not allowed under generally accepted accounting principles. This is due to the fact that the cash basis does not record revenue when it is earned, and therefore violates the principle of revenue recognition. At the same time, the cash basis does not allow for recording the expenses as they occur, which is a violation of the matching principle. The cash basis measures can mislead or misrepresent the true financial picture of a...
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...Learning Team Financial Reporting Paper Monica Fisher, Christina Owens & Michael Walker ACC/290 May 6, 2014 Jackie Lewis Learning Team Financial Reporting Paper This paper will examine Amazon.com.inc; arguably the world’s most customer centric company and a publicly traded company recent annual and previous year financial reports. Information within this report comes from data collected from the (SEC) Security Exchange and Commission and Amazons reports. In addition, The Company’s balance sheet and income statement is analyzed to answer the following questions: What are the company’s total assets at the end of its most recent annual reporting period? Amazons December 31, 2013 Consolidated Balance Sheet (in millions) reflects total assets of $40,159,000. Why is this important? Because it represents growth, the financial position of Amazon, and the consolidated results of its operations. What are the total assets at the end of the previous annual reporting period? Amazons December 31, 2012 Consolidated Balance Sheet indicates the company’s total asset was $32,555,000. How much cash and cash equivalents did the company have at the end of its most recent annual reporting period? The Company had $8,658,000 cash and cash equivalents at the end of 2013. What amounts of accounts payable did the company have at the end of its most recent annual reporting period? The company had a total of $15,133,000 in liabilities due under accounts payable ending December...
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...Wendell Gordon ACC/290 July 26, 2012 Shonda Meadows For years people have debated on which one of the financial statements was the most important. The purpose of this paper is to identify the four basic financial statements and the purpose they serve. Throughout this paper I will breakdown how the different financial statements could be useful for managers and their employees. I will also discuss how the different financial statements could be beneficial for creditors and investors. To conclude the paper I will summarize it all up with a conclusion. The four basic financial statements are balance sheets, income statements, cash flow statements, and statements of shareholders’ equity. Balance sheets break down what all a company owes and owns at a particular period of time .Balance sheets also contain valuable information such as a company’s liabilities, shareholders equity, and assets. Balance sheets contain information at the end of a reporting period. Balance sheets do not contain the all the ins and outs to accounts during a reporting period. A balance sheet is also referred to as a statement of financial position. Income statements provide you with how much money a company made and spent over a period of time. Income statements also provide you with the cost and the expenses associated with earning money. The bottom line on an income statement provides you with the amount of money a company loss or made. The top line on an income statement provides you with the amount...
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...Team Reflection Paper Team B ACC/290 12/18/2012 Martha Muhammad Team B Reflection Paper Accrual Basis versus Cash Basis A business can choose between two different accounting methods. Accrual basis and cash basis are two different methods that businesses can use to record the financial transactions. Under accrual basis, a business records revenue, whenever the money is earned instead of waiting to actually receive cash payments. The accrual basis accounting allows businesses to match revenues to the expenses incurred in earning them, providing the company with helpful information for financial reports. Under cash basis accounting, businesses wait to receive the money before recording it as revenue. The cash basis method is simple quick and easy, but if the business makes sales or purchases on credit, the cash basis method does not reflect the results of Operations. A trial balance is a list of all the balances of ledger accounts which is constructed after the preparation of adjusting entries in a business. An adjusted trial balance includes balances of revenues and expenses along with assets, liabilities, and equities. Adjusted balances can be used directly in the preparation of the statement changes in stockholder’s equity, income statement, and the balance sheet. However, the adjusted final balance sheet does not provide specific information regarding the preparation of the statement of cash flows. Here is an example of an adjusted...
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...Financial Statements Paper Desiree Dominguez Acc/290 10-29-12 Lyle Burkett Financial Statements Paper Financial statements are key components in revealing the financial health of an organization. A company's financial information can get quite complicated, but business owners and investors should understand the basics of how to read financial statements. Most businesses produce four major financial statements, including the income statement, balance sheet, cash flow statement and statement of shareholders’ equity. Understanding the elements of these statements and how they relate to one another can help you understand a company’s financial position and make good decisions in relation to the organization. Income Statement A firm's revenues, gains, expenses and losses are listed on the income statement. Revenue is money earned from a company’s normal business operations. The expenses on the income statement are the costs associated with earning the revenue. When a company sells one of its assets, it can experience a capital gain or loss. Revenues minus expenses, plus gains minus losses, equal net income or net loss. The dollar amount of net income listed on the income statement is also found on the cash flow statement under the operating activities section. Balance Sheet The balance sheet includes the elements of the accounting equation: assets equal liabilities plus shareholders’ equity. The assets on a balance sheet are classified as either...
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...Week 1 Financial Statements Paper John Dow ACC/290 2/24/2014 Week 1 Financial Statement Paper. In the accounting realm there are many terms that get tossed around and it can become quite baffling. The great thing I have learned thus far is that there are four basic financial statements that we operate on today. These statements are very important to the vitality of a company/corporation to continue business in a progressive fashion. In the following text I will articulate the needs and importance of the four basic financial statements, and why they are necessary. The four basic financial statements are: * Balance sheet. * Income statement. * Retained earnings statement. * Statement of cash flows These four statements are essential to the successful operating of a company. With these four statements you can feel prepared when you head to a bank and request a loan for your business, or decide to invest into the stock of a company. These four statements also hold the required information to properly lead a company to higher growth potential and sustainability. The balance sheet is a term that most have heard of, this statement tells the internal or external user of the total assets owned compared to the liabilities or debt at a certain time. This statement is crucial for internal use so that managers can decipher whether they have cash on hand, or if there are going to be layoffs. Lending companies require companies to hand over their balance sheet to...
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...Financial Statements Paper Phillip Carter ACC/290 November 19, 2012 Michael Olsen Financial Statements Paper There are four basic financial statements involved in the basic accounting process. These reports summaries the financial activity of a company over a specific time period. The first of fore is the balance sheet. The balance sheet reports assets and claims to assets at a particular point in time. Claims to assets are divided into two categories; claims of creditors and of owners. This relationship is where the name balance sheet comes from (Wiley Plus, 2012). Assets must balance with claims to assets. For example the balance sheet lists assets such as cash, accounts receivable, equipment and buildings as well as, land. Additionally, the balance sheet outlines liabilities such as accounts payable and notes payable. Moreover, the balance sheet brings to bear the owners’ equity. Consequently, liabilities and owners’ equity should balance with a company’s assets. The balance sheet is a report on the company’s resources. This information can be useful to internal customers in management rolls to determine how much cash is on hand. Additionally this information is useful to external stakeholders such as creditors and investors who can use the data to determine if the company will be able to repay their debt (Wiley Plus, 2012). The second financial statement we will discuss is the Income Statement. This statement lists the company’s revenues against its expenses....
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...Finance Statements Paper Kimberly Nelson ACC/290 06/12/2012 David Schwanke Finance Statements Paper When preparing financial statements for a company it is important to recognize the four basic financial statements and to understand the purpose of each statement and how it may affect internal and external users. This paper will cover each statement in sequential order and will discuss how the statements are useful to internal and external users. Income Statement- The income statement lists the company's revenues followed by its expenses. The final numbers from this calculation will indicate net profit or loss. The success or failure of the company's operations for a period of time is derived from this calculation. Managers use the income statement as a means to determine if the companies’ operations are profitable. The income statement reports on the success or failure of the company’s operations by reporting its revenue and expenses. Adjustment to its operations may need to take place internally to continue profitability. Investors are interested in past net income because it provides useful information for predicting future net income. Creditors also use the income statement to predict future earnings. Retained Earnings Statement- The retained earnings statement shows the net income retained in the corporation. The time period covering the retained earnings is the same time period of the income statement. That time period can be represented monthly, quarterly...
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...RUNNING HEAD: FINANCIAL STATEMENTS PAPER Financial Statements Paper ACC 290 Financial Statements Paper In this paper the four basic financial statements will be defined. Each of the four financial statements has its purpose for use. As part of the paper the description of the purpose of the four basic financial statements is acquired. The discussion of the financial statements would be useful to internal and external users is performed as well in this paper. The four basic financial statements are the balance sheet, income statement, retained earnings statement, and statement of cash flow (Kimmel, Weygandt, Kieso, 2011). The balance sheet is used to present a picture of what a company owns (Kimmel, Weygandt, Kieso, 2011). The balance sheet reports the amount of assets and claims to assets for a period of time (Kimmel, Weygandt, Kieso, 2011). Assets are items the company owns that could be used if needed to retain cash. The claims to assets are either creditor or owner. The creditor would be the individual or company that is using the asset as collateral to a debt. Once debt is paid the creditor releases asset back to owner. The income statement is used report the financial health of the company in a certain time frame (Kimmel, Weygandt, Kieso, 2011). The income statement provides the revenues and expenses in the time frame (Kimmel, Weygandt, Kieso, 2011). The revenue is the income funds, and expenses are the outgoing funds. The...
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