Accounting Statements Bethany Edings Acct/290 January 25, 2013 Doyle Jones University of Phoenix

Accounting Statements
In business finance there are four main statements. The financial statements are balance sheets, income, cash flow, and statement of retained earnings. Each statement shows specific information about a business’s financial history. A balance sheet shows a company its current debts and how much it has at any given time. Income statements illustration what was spent and how much of a profit the business made. A cash flow statement shows the relationship between a company and the world during a given date. Next a statement of retained earnings indications any changes that would affect stockholders over time. A balance sheet gives information about a company’s assets, liabilities, and shareholders’ equity. Balance sheets have three components. The components of a balance sheet are assets, liabilities, and stockholders’ equity. Assets are objects or property that has cash value. These items can be used or sold to make a product or to provide services. Cash and investments are also assets. Liabilities are what a company owns to other companies or people. This can include loans, taxes, rent, cost of materials, and payroll. Liabilities are also services or products due to a customer. Shareholders’ equity or capital is what a company would have if the liquidated assets and paid all liabilities. The money left would go to the owners or stockholders. Income statements report how much returns a company earned over a set time period, such as six months or a year. An income statement also shows the costs that went with making that revenue. The bottom line will state the profits or the losses of the company. Cash flow statements show cash as