Financial Statements

Financial Statements Paper
Jennifer Meadows
ACC/290 Principles of Accounting I
October 17, 2011
















Financial Statements
Financial logical arguments provide knowledge habitd to secure important decisions by both versed and external users. The four basic financial statements used by versed and external users are the income statement, the retained earnings statement, the equalizer sheet, and the statement of cash flows. These financial statements are tied to to each one other and if one is incorrect, the information on the other statements allow be incorrect. The topic of discussion in this paper allow for be to describe the four financial statements and determine how internal and external users use each of these statements.
Income Statements
Income statements report revenues minus expenses for a net income or firing of the makeup. Owners, managers, and employees measure the organizations success or failure by reviewing the income statement. Potential investors can use gone and present income statements to predict future income or loss. Investors want to make sure that an organization allow be profit fitted forwards investing money into an organization.



If the past and present income statements show loss or very little net income investors may solve the organization is not worth investing in. Creditors leave alone use the income statement much like potential investors would. Creditors want to condition that if they extend credit to an organization, the organization will be able to pay back the money in a middling amount of time. The net income or loss reported on the income statement is used on the retained earnings statement (Kimmel, Weygandt, & Kieso, 2011).
Retained Earnings Statement
The retained earnings of an organization will depend on the net income or loss of an organization. If an organization reports a loss on the income statement there will be no earnings for the organization to retain. If the income statement reports a net...If you want to get a full essay, order it on our website: Orderessay



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