Written Assignment WA 3
"Financial statements are records that provide an indication of an individual's, organizations, or business' financial status. There are four basic types of financial statements: balance sheets, income statements, cash-flow statements, and statements of retained earnings. Typically, financial statements are used in relation to business endeavors. Balance sheet financial statements are used to provide insight into a company's assets and debts at a particular point in time. Information about the company's shareholder equity is included as well. Typically, a company lists its assets on the left side of the balance sheet and its debts and liabilities on the right. Sometimes, however, a balance sheet has assets listed at the top, debts in the middle, and shareholders' equity at the bottom.
Income financial statements present information concerning the revenue earned by a company in a specified time period. Income statements also show the company's expenses in attaining the income and shareholder earnings per share.
At the bottom of the income statement, a total of the amount earned or lost is included. Often, income statements provide a record of revenue over a year's time. Cash-flow financial statements provide a look at the movement of cash in and out of a company. These financial statements include information from operating, investing, and financing activities. The cash-flow statement can be important in determining whether or not a company has enough cash to pay its bills, handle expenses, and acquire assets. At the bottom of a cash-flow statement, the net cash increase or decrease can be found.
Statements of retained earnings show changes in a company's or organizations retained earnings over a specific period of time. These statements show the beginning and final balance of retained earnings, as well as any adjustments to the balance that occur during the reporting...