Of The Income Statements, Income Statement, Balance Sheet, And Statement Of Cash Flows

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Introduction Managers within the firm, as well as the firm’s owners and lenders, keep track of the firm’s performance by reviewing its financial statements - income statement, balance sheet, and statement of cash flows. I will discuss several items regarding these financial statements. Firstly, I will discuss the purpose of the income statement and identify the major types of expenses that are shown on the income statement. Secondly, I will discuss the purpose of the balance sheet and identify the major types of assets, including the claims of creditors and owners shown on the balance sheet. Thirdly, I will discuss the three different accounts that comprise the owners’ equity section on a corporate balance sheet. Finally, I will discuss a statement of cash flows and the three standard sections contained therein. Income Statement The income statement reports the revenues generated and …show more content…

The current assets of a business are exactly that; cash and other assets that can be obtained within a year. This is also called working capital because it can sustain the operations of a business. In addition, this current asset allocation can be in the form of marketable securities and inventories. Accounts receivable can pertain to several types of things, first and foremost it can be from the sale of products, merchandise, or services on credit. Furthermore, it can be in the form of a short-term or long-term loan made by the business owners to employees (Melicher & Norton, 2013, p. 360). Assets can also be physical in nature for a company, such as a plant building and its respective equipment. Additionally, Land is a formidable asset to have. Intangible assets such as goodwill, are considered when a company is bought out or merges with another company, especially if that gaining company has more value than the other (Melicher & Norton, 2013, p. 360). Owner’s Equity

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