ï»¿Phase 1 Discussion Board 2
Colorado Technical University Online
August 20, 2014
Financial Statements and Analysis
The four main financial statements that are utilized on financial statements analysis contain balance sheets, statements of financial positions, the income statements, and statement of operations, statement of change in shareholders equity, and the statements of cash flow (CTUO, 2014).
The one I choose to discuss is the balance sheets, which is a vital part of the financial statement utilized via accountants and owner businesses. The balance sheet will present business financial positions at the end of a stated date. A few describes the balance sheet like a photograph of a business financial positions at a point, moment, and instant in time. The major element in the balance sheet contains assets that the business owns, liabilities involve the obligations of a ...view middle of the document...
The users will use these information for making complicated decisions like which employee they would discharge and whether to increase operation.
Generally accepted accounting principle (GAAP) can be called the international convention of goods accounting practice and its base on these core principles; business entity concept, continue revenue recognitions, convention concern concepts, principles of conservatism, objectivity principles, match principles, cost principles, consistency principles, materiality principles and full disclosure principles that certain instance specific kinds of accountants who has diverge from these principles would be hold accountable (Find an accountant, 2014).
The financial statements, income statements, balance sheets, and cash flow statement would be considered interrelated. The income statement will describe how asset and liabilities are being utilized in the specified accounting periods, cash flow statements would explain the cash inflow and outflow that would eventually show amount of currency the business will have on hand in turn would be registered on the balance sheet. Alone, each one would merely provide a fraction of the story on business financial conditions, but jointly theyâ€™ll be providing a finished picture (Investopedia, 2014).
Averkamp, Harold (2014). Balance Sheet (Explanation) Retrieved August 20, 2014 from: http://www.accountingcoach.com/balance-sheet/explanation/3
Boundless.com (n.d.). Uses of the Balance Sheet Retrieved August 20, 2014 from: https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/financial-statements-overview-3/the-balance-sheet-25/uses-of-the-balance-sheet-159-6010/
Find an accountant (2014). GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (G.A.A.P) Retrieved August 20, 2014 from: https://www.findanaccountant.co.za/content_GAAP
Investopedia (2014). The Relationship Between the Financial Statements Retrieved August 20, 2014 from: http://www.investopedia.com/walkthrough/corporate-finance/2/relationship-financial-statement/relationship.aspx