known as financial statements are divided into four categories: 1. “Income Statement- Presents the revenue and expenses and resulting net income or net loss of a company for a specific period of time. 2. Retained Earnings Statement- Summarizes the changes in retained earning for a specific period of time. 3.
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Statements Marta Karina Briones ACC / 290 July 25, 2013 Professor Louann Schloss The Four Basic Financial Statements There are four basic financial statements in accounting, which are as follow: a balance sheet, an income statement, a retained earnings statements, and an income of cash flows. Each of these statements has their individual purpose in the field of accounting. According to Kimmel (2011),”…the four financial statements form the backbone of financial accounting.” The first statement
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then record the events to have a history of financial activities (Weygandt, 2008). After recording economic events of a company the accounting department will communicate the information to interested users consisting of CEO’s, CFO’s, investors, management, and officers. The accounting information provided by a company is helpful to both internal and external users. Internal users consisting of managers, officers, and directors use the information to make decisions to buy or sell stock, increase or
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accounting process includes the bookkeeping function that usually involves only the recording of economic events (Weygandt, 2008). Collectively, accounting involves the entire process of recording, identifying, and communicating economic events. Management uses accounting information in planning, controlling, and evaluating business operations. Other groups that use accounting information are tax authorities, regulatory agencies, customers, labor unions, and economic planners (Weygandt, 2008).
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Identify the four basic financial statements. The four basic financial statements a company can produce are the Income Statement, Retained Earnings, Balance Sheet and Statement of Cash Flows. All these statements are prepared for a specific period in time, usually on a monthly, quarterly or annual basis. Describe the purpose of each of the four financial statements. The Income Statement summarizes the fees earned, less any operating expenses to show if the company is profitable. The
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According to the forecast stated by Margarita Torres, the management expectations might be overestimated ($118m in the forecast, $125m-$150m). The membership per store is a relevant factor in determining the future performance of Costco, given that Costco’s goal is achieving low gross margins. The membership base will contribute directly to the net income and promotes a sustainable income for each store. The pre-tax margin defined by the management is achievable; hence the forecasts in the common size
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these parts provide excellent information about the company’s finances that identify, record, and communicate its finances. The financial statement has four parts and how these parts interrelate to each other they are the Income statement, Retained earnings statement, Balance sheet, and Statement of cash flows to help the company provide relevant financial data for internal and external users. According to Weygandt (2008), Accounting consist of three basis activities and it is an information system
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Professor Bobby Nelson, MBA, CPA Owners’ Equity Week one objectives include components of paid-in capital, earned capital, diluted earnings, and basic earnings. In the following paragraphs we will discuss (1) why it is important to keep paid-in capital separate from earned capital (2) why paid-in capital or earned capital more important, and (3) are basic or diluted earnings per share more important. Separating paid-in capital from earned capital Paid-in capital represents the amount of funding the
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income statement, earnings statement, and statement of cash flows. A balance sheet is used to show an illustration at a certain point in time of a business’s assets, what the business owns, and a business’s liabilities, what the business owes. To report your business’s revenues and expenses, an income statement is used to represent how profitably your business functioned during a certain period of time. A retained earnings statement is used to represent how much of past earnings were dispersed among
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financial statements. The four basic financial statements include; income statement, statement of retained earnings, balance sheet and statement of cash flows. The income statement “presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time” (Weygandt p. 21). The retained earnings statement “summarizes the changes in retained earnings for a specific period of time” (Weygandt p. 21). The balance statement “reports the assets, liabilities, and
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