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Financial Statement Paper

780 words - 4 pages

Financial Statement Paper
xxxxxx
ACC/290
January 29, 2013
Dr. Norris Dorsey

Financial Statement Paper

This week’s individual assignment is to identify the four basic financial statement reports used in basic accounting principles and concepts. It also is to describe the purpose of these four reports and how they would be of use to both managers and employees as an internal component. It is also to describe the external use to investors and creditors.
The four monetary financial statements are the balance sheet, income statement, capital statement as well as the statement of cash flows. A balance sheet shows what a business has. A balance sheet is a statement of business or ...view middle of the document...

The monetary report would be helpful to make decisions concerning money in a near future time according to forecast. Internal users may also use monetary reports to set performance objectives. The internal user will provide information from income statement reports to observe exactly where a business requires enhancing income from other divisions.
The expenses obtained from the income statement reports may be used to indicate internal users exactly where cutback requirements being. Internal users depend on monetary reports to help guide the business in everyday activities.
External users just like investors and creditors use monetary reports to evaluate a business’s performance. The information taken from the monetary reports are used to make decisions to purchase, hold, sell, or lend. Investors use the income statement reports to evaluate a firm's revenue to forecast future revenue. Investors use the information of possible revenue to ensure that they know when to purchase and sell stock from businesses. Creditors use income statement reports to evaluate the future of businesses. Creditors or lenders require making certain that a business can pay back money when borrowed.
The capital statement report is also helpful to investors and creditors alike. By investors checking capital statement reports, investor will be aware of a company’s day- to-day routine. The checking enables investors to make a choice whether or not to invest. The...

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