Financial Statements Paper

Financial Statements Paper
Teresa Sexton
University of Phoenix
Principles of Accounting I
ACC/290
An terminalte Anigwe
May 07, 2012

Financial Statements Paper
Financial statements ar records that outline the financial activities of a business, an individual or any(prenominal) other entity. Financial statements are meant to present the financial discipline of the entity in question as clearly and concisely as possible for both the entity and for readers. Financial statements for businesses usually include: income statements, correspondence sheet, statements of carry earnings and cash flows as well as other possible statements.
An income statement reports on the success or failure of the companys operations by presenting the revenues and expenses of a company for a specific period of time. An income statement is also known as a profit and loss statement. In line of battle to recognise an income statement, a full understanding of vernacular versus net income is essential.
consummate(a) income, also known as revenue, is the fit income made. In speechmaking of business gross income, any money that comes into the business is gross income. When working for a company and receiving a paycheck, the gross income is the total salary before taxes or other deductions.




Net income for a business is gross income minus any expenses incurred related to the business. For individual(prenominal) income, the net income equals gross income minus taxes or other deductions interpreted from the paycheck.
Simply put, the income statement reports the gross income minus any salute of goods or expenses to equal the net income received for a assumption period of time. It tells the business exactly how oftentimes money was received, how much of that income was expensed at operating the business and how much income the business has left(a) at the end of a specific period of time. The net income is then transferred to the balance sheet as equity.
A retained earnings statement summarizes the changes in retained earnings that put one across occurred for a specific...If you want to get a full essay, order it on our website: Orderessay



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