Balance and Income sheets are vital to the health of any organization or company. Understanding the intricacies relating to their return on investment (ROI) is equally important as the ratios that affect each accounting principal. Our team reflection permitted us to share relevant information about our daily profession classroom experience. Engaging in personal dialogues with our team help reinforce curriculum through self-questioning, peer generated inquires in the classroom, and question answered from different points of view. We understand that both reports provide a snapshot of the business financial status at a particular juncture in time. However, interpreting data over a span of time appears daunting. The data on these sheets feature assets, liabilities and equity during a specific time of the year, whether it’s monthly, quarterly, or annually. Assets have monetary value and are usually categorize on the balance sheet. Under normal circumstances, these resources either generate cash or the end users deplete the finish goods. On occasions additional financial backing is needed to invest or expand. Lenders can review balance sheets to determine what the company owes compared to what they own. Bankers can then make informed decisions to determine whether or not the business qualifies for additional funding. The balance sheet helps us understand the health of the company. A liability represents payables to creditors. Some accountants refer to this as claims against the company’s assets. Liabilities and equity mirror each other on the report because both are interdependent. A team member stated that Owner's Equity has a kinship with the company when the owner is a sole proprietor. And if the company is a corporation, the words Stockholders'
