Financial Statement Paper

In: Business and Management

Submitted By 1brianj
Words 914
Pages 4
Financial Statement Paper
Kaitlin Williams
University of Phoenix
ACC/280-Principles of Accounting
Carol Demuth
Jun 22, 2011

Financial Statement Paper Businesses today need to run quickly, efficiently, and have smaller margin for error than ever before. To keep up with the fast paced world around them, companies must assure things run as smoothly as possible to have a chance at competing with their competitors. One of the biggest details that have to be correct is the company’s accounting. Getting the numbers right isn’t just important, it’s the reason that a business can make money. Without proper accounting, it would not be possible to know how much money is being made or lost, what can be done to change these things for the better, or even where the money ends up. It is a part of everyday business, and will be as long as people continue to do business.
Accounting is utilized to record all of the receiving, sending, and all other transfers of money for a particular company. Think of it like the balancing of a checkbook for an entire business as opposed to a personal bank account. If transactions are not kept up with, money can easily fall through the cracks and companies could lose a substantial amount of it simply by not knowing what the numbers should look like. It would be impossible to know if someone was stealing money from the company, or if a company that business was done with had actually paid its bill correctly. Accounting is more than a necessity, it is impossible to run a business otherwise; without it, a business would certainly go under due to its own ignorance and lack of attention to its own detail.
Accounting has several basic assumptions, principles and constraints. They are revenue recognition principle, full disclosure principle, matching principle, cost principle, time period assumption, and monetary unit assumption, economic…...

Similar Documents

Financial Statements Paper

...Financial Statements Paper Thomas Hastings ACC/290 April,11,2012 Rolland Roup Financial Statements Paper In the accounting world there are four different financial statements. These financial statements provide a very wide amount of information which is very valuable information to internal and external users in many different types of companies. These four financial statements are the balance sheet, income statement, retained earnings and statement of cash flow. These four financial statements form the backbone of financial accounting. (Kimmel, Weygandt, & Kieso, 2009) Each of the four financial statements has its own use’s within accounting and each provides different and very crucial information to its proper user’s. The first financial statement is the balance sheet, the balance sheet shows a picture at a point in time of what your business owns (its assets) and what it owes (its liabilities). The second financial statement is income statements show how successfully your business performed during a period of time, it reports revenues and expenses. The third financial statement is retained Earnings are used to indicate how much of the previous income was distributed to you and the owners of your business in the form of dividends, and how much was retained in the business to allow future growth. The fourth financial statements is statement of cash flow is to show where your business obtained cash during a period of time and how that cash was used. (Kimmel,...

Words: 715 - Pages: 3

Financial Statements Paper

...Financial Statements Paper The 4 fundamental monetary reports are the balance sheet, income Statement, retained earnings statement, as well as statement of cash flow (Kimmel, Weygandt, Kieso, 2011). The balance sheet is used to show an idea of what a business has (Kimmel, Weygandt, Kieso, 2011). The balance sheet reports the quantity of assets and claims to assets for a time period (Kimmel, Weygandt, Kieso, 2011). Assets are products the business has that might be used if required to get money. The claims to assets are either lender or proprietor. The lender could be the person or business that's using the asset as security to a debt. As soon as debt is paid the lender releases asset returning to proprietor. The Income statement is used to report the fiscal health of the business in a particular time period (Kimmel, Weygandt, Kieso, 2011). The income statement offers the revenues as well as costs in the time period (Kimmel, Weygandt, Kieso, 2011). The income is the revenue funds, and expenditures are the outgoing funds. The retained earnings statements indicate how earlier revenue was distributed to proprietors in the shape of dividends (Kimmel, Weygandt, Kieso, 2011). The retained earnings statement report provides the company the capability to evaluate just how much are received and also the modifications to the earnings. The timeframe used to compute retained earnings statement will be exact same as described on the income statements. The statement of cash flow states......

Words: 789 - Pages: 4

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Nancy Negron ACC/561 Accounting April 15th, 2013 Tom Myers Financial Statement Differentiation Paper In accordance with the United States Securities and Exchange Commission (SEC) the financial statements are as easy to read as a nutrition label (US Securities and Exchange Commission, 2007). There are basic financial statements such as the income statement, which show how much revenue a company acquired during a specific period, the bottom line of company earnings or losses (Kimmel, Weygandt, & Kieso, 2009). The balance sheet, which shows the company’s assets (things that the company owns that have value), liabilities (money that the company owes) and shareholder’s equity (the capital or net worth that belong to the shareholders or owners) (Kimmel, Weygandt, & Kieso, 2009). The cash flow statement, which shows how the company manages the flow of cash in the different business activities such as operating, financing, and investing (Kimmel, Weygandt, & Kieso, 2009). Finally, the statement of equity, which shows any action with the shareholder’s or owners of the company for a specific time, this statement also shows assets and liabilities changes that do not affect the income (Kimmel, Weygandt, & Kieso, 2009). These statements are related to each other because more than one input of the statements is needed in other statements. For example, any changes on the assets or liabilities in the balance sheet are......

Words: 800 - Pages: 4

Financial Statement Paper

...Financial Statements Paper Twanda Anderson ACC / 280 Principles of Accounting Michael Ford August 15, 2011   Financial Statements Paper Many people assumed that accounting is just adding and subtracting numbers but financial accounting has several important parts for a business to be profitable. In the accounting process there are significant parts and these parts provide excellent information about the company’s finances that identify, record, and communicate its finances. The financial statement has four parts and how these parts interrelate to each other they are the Income statement, Retained earnings statement, Balance sheet, and Statement of cash flows to help the company provide relevant financial data for internal and external users. According to Weygandt (2008), Accounting consist of three basis activities and it is an information system that identifies, records, and communicates the economic events of an organization to interested users. Accounting has two primary qualities that make its information useful for decision making and they are relevance and reliability. The primary purpose of accounting is to provide a financial report showing its performance during a specific time period usually for a year. These reports are made available for its user’s which are creditors, stockholders, and tax authorities. Accounting is also the financial information that gives an organization/company its understanding of what is happening financially to......

Words: 940 - Pages: 4

Financial Statement Renstatement Paper

...Running head: FINANCIAL STATEMENT RESTATEMENT Financial Statement Restatement Paper Financial Statement Restatement Paper Companies must often restate their financial statements to address certain issues that have occurred within the company including changes in accounting principles, changes in accounting estimates, changes in the reporting entity, and errors in their financial statements. “The FASB classifies changes in these categories because each category involves different methods of recognizing changes in the financial statements” (Kieso, Weygandt, & Warfield, 2007, p. 1153). Zynga is the social gaming company responsible for games including Farmville and Mafia Wars. In August of 2011 the company was faced with restating their financial statements for the first quarter of that year due to the detection of certain errors regarding their stated deferred revenue balances. Restatement On August 11, 2011 Zynga, “restated Q1 revenue to reflect an accounting error in its original IPO registration. The new Q2 revenue figure is $242.89 million, which represents more than a 3% increase over the previously-reported figure” (Primack, 2011). Zynga stated that they initially stated their most current estimate for paying players for the current period. However, they did not adjust their ending balance in the account deferred revenue to reflect estimates for the related sales of prior periods. The company determined that ASC 250 required this adjustment of the ending......

Words: 738 - Pages: 3

Financial Statement Paper

...Financial Statements Paper ACC/290 – Principles of Accounting I May 14, 2010 Adael Acosta Assessment • Individual Assigment: Financial Statements Paper Write a 700- to 1,050-word paper in which you do the following: o Identify the four basic financial statements. o Describe the purpose of each of the four financial statements. o Discuss how the financial statements would be useful to internal users, such as to managers and employees. o Discuss how the financial statements would be useful to external users such as investors and creditors. Format the paper consistent with APA guidelines. Abstract Accounting is a valuable service function designed to provide accurate and timely information to internal and external stakeholders. Those stakeholders rely on four primary financial statements: the income statement, the capital statement, the balance sheet, and the statement of cash flows. Naturally, you begin by studying those four financial statements and the accounting processes that lead to their creation. Those processes include recording financial transactions in journals and then posting to the general ledger. Financial Statements should be defined as journal entries. These entries tell a story about the daily accounting practices and they project the general assets and liabilities of any company. Journal entries must be consistent and must be entered on a regular basis. Investing in reliable accounting software would be a wise decision for any......

Words: 931 - Pages: 4

Financial Statement Paper

...Financial Statements Paper Brittany Williams University of Phoenix Principles of Accounting I ACC/290 Kelvin Chang November 26, 2013 Financial Statements Paper In the accounting world, there are four basic financial statements that are normally prepared by profit-making organizations. These are balance sheet, income statement, statement of retained earnings, and statement of cash flows. Each of these statements serves a very important purpose in keeping track of the finances for a company. The balance sheet pretty much shows a company’s current monetary position on an exact date. As the name suggests, it is a quick reference for individuals to visually see how the company is balancing their assets, liabilities, and stockholders equity. How is this important? Well a company’s assets are what resources the company currently has at that specific time. Liabilities are the debt a company owes to other people or companies that are still outstanding. Finally, stockholders equity is what the stockholders claim against the company’s assets. The income statement is what shows the results of the company's operations for a set period of time. The income statement also summarizes a company’s revenues (sales) and expenses quarterly and annually for its fiscal year. In short this is what shows the history of the company’s gains, expenses, and losses which compiled together equals out to the company’s final net income for that time period. This final net figure, as......

Words: 774 - Pages: 4

Financial Statement Restatment Paper

...Financial Statement Restatement Paper ***** ****** ACC/537 January 13, 2014 Financial Statement Restatement Paper MicroStrategy, Inc. went public in June 2008. It is a software company that had been identified as, “a successful, growing company with positive net income” (Krishnan & Mintz, 2007). Like many managers, the managers at MicroStrategy, Inc. wanted to make a quick profit by using aggressive accounting techniques that artificially boosted revenues, inflated earnings, and raised the stock price of shares. The stock price rose from $20 to $333 in one year after the IPO. The company announced in March 2000, that they were planning to restate financial results for the fiscal years 1998 and 1999 (Krishnan & Mintz, 2007). The company needed to restate its financial statements due to improperly applying early revenue recognition in fiscal periods. The company had been recognizing revenues earlier than what was allowed under GAAP. The company would hold open contracts that had been signed by customers after the close of the quarter until the company obtained the desired quarterly financial results, the company would undersign the contracts and give them an effective date that was in the last month of the previous quarter (Krishnan & Mintz, 2007). The restatement of MicroStrategy, Inc’s financial statements reduced the companies combined revenues for the years 1998 and 1999 to $247 million down from $312 million. About 83 percent of this change was......

Words: 534 - Pages: 3

Financial Statement Restatement Paper

...Financial Statement Restatement Paper Justina Kabanuk University of Phoenix ACC/537 Financial Accounting Steven Hall July 5, 2010 Financial Statement Restatement Paper Financial statement users depend on accurate financial statements from corporations to make proper decisions in regard to financial activities. In rare situations, financial statement users find that the information they had depended on for their decisions was not accurate. Companies required to restate their financial reports risk losing the trust and confidence of the financial statement users. Overstock.com is an example of a company that knows the effects of restating their finances all too well. Following is an overview of the issues that led to the most recent restatements of Overstock.com’s financial statements. Additionally discussed are the accounting principles involved, the effect of the errors and changes to the financial statements, and the effects on the company’s stockholders. In October 2008, Overstock.com publicly announced that it would be restating financial results for a five-and-a-half-year period. The needed revisions to Overstock.com’s Q1 2003 to Q2 2008 financial statements were estimated to reduce revenues by......

Words: 845 - Pages: 4

Financial Statements Paper

...Financial Statements Paper University of Phoenix Principles of Accounting 280 David Fewkes September 13, 2010 Financial Statements Paper Accounting consists of three basic activities-it identifies, records, and communicates the economic events of an organization to interested users (Weygandt, p. 4). Managers and Chief Executive Officer’s use financial statements to promote sustainability and track financial decline. These statements are also used by auditors, creditors, and the Securities and Exchange Commission. Stock investors rely on accurate accounting data before purchasing stock. These investors want to make sure they are investing in a profitable company and it has a minimum risk level. Listing erroneous information can create a negative outlook on any company. The income statement reports the success or profitability of the company’s operations over a specific period of time (Weygandt, p. 21). This statement shows how money has been earned and it also lists how much a company has lost and profited from regular business activities. This statement lists detailed information pertaining to expenses and revenues. Knowing how much an employer is spending on salaries can assist him or her in projecting future expenses. Companies are required to provide a DUNS number when they apply for grants and credit. A company’s credit worthiness is based on the financial condition of the company. The balance sheet lists the company’s assets,......

Words: 766 - Pages: 4

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Name ACC/561 Date Instructor Financial Statement Differentiation Paper Financial statements arrange financial information into statements that prove to be the financial accounting backbone. The income statement, statement of cash flows, retained earnings statement, and balance sheet arrange the expenses, liabilities, revenues, and assets of a company into formats that provide a clear view of different areas of interest. These areas are of interest to the investors, creditors, and management of the company (Kimmel, 2011). All four of these financial statements prove to be of interest to all three financial statement users in multiple ways. The Four Financial Statements Each of these four financial statements provide insight necessary to keep a company fully functional and profitable. An income statement provides a clear view of how successful the performance of a company was within a period of time through reporting the revenues and expenses within that period. The net income, which is determined through use of the income statement, proves to be valuable information in many different areas of financial interest. The statement of cash flows presents where cash was obtained within a time period and how it was used within the company during that time. This shows how the investing, financing, and operating activities of the company effects the amount of cash at the period’s end. To determine the amount of previous......

Words: 852 - Pages: 4

Financial Statements Paper

...In the following paper, it is discussed how accounting is a strong part of a company. Through research, this paper states the many parts of accounting such as the four basic financial statements and the purpose of accounting. Business is restricted to processes and reports to make decision making with accurate information through the accounting practices of bookkeepers. Through analysis, the following paper, describes a small glimpse of the accounting process and how they relate to each other. Purpose of Accounting The purpose of business accounting is to identify and record activities that will impact the organization or company financially. These activities can include sales, purchases, the interest earned from investments, and acquisition of other capital. Activities like these can be categorized in terms and posted as an accounting record. The accounting cycles typically is recorded in ledgers and journals and is part of the process. Systems and processes are developed by accountants to analyze different transactions. Each transaction that involves the sale of goods and services needs to be recorded in a general ledger which needs to be evaluated and analyze. As they are posted to their specific account, bookkeepers use this function of accounting to help maintain each transaction as debits and credits. Bookkeepers are responsible for specific types of financial activities which are typically used to analyze the value of accrual method of accounting, providing......

Words: 843 - Pages: 4

Financial Statements Paper

...Financial Statements Paper Accounting information consists several areas of interest for users looking to interact with a business. These areas include assets, liabilities, expenses and revenues. The information reflecting these areas of interest is used to populate financial statements. The backbone of financial accounting is made up of four basic financial statements. These four financial statements are a balance sheet, an income statement, a retained earnings statement, and a statement of cash flows. Users utilize these basic forms to keep track of financial areas of interest in a business such and to make decisions. The balance sheet is used to paint a current picture of what a business owns, or it’s assets. It also paints a current picture of what a business owes, or it’s liabilities. The income statement is used to show just how well or successful a business has done for a certain period of time. In this statement, a businesses revenues and expenses are reported. The retained earnings statement is used to show a couple of key things within a business. First, it is used to show how much previous income was distributed to the owners of the business in the form of dividends. It also shows how much of that previous income was retained in the business to allow for future growth. The statement of cash flows is used to show where a business obtains any cash during any given period of time. It also details how the business used these monies in that......

Words: 649 - Pages: 3

Financial Statement Differentiation Paper

...Financial Statement Differentiation Paper Jason Raines ACC/561 January 9, 2012 Cathleen Davis Financial Statement Differentiation Paper There are four basic financial statements that help business keep track of what is coming and going on a daily basis. “They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders’ equity” (Beginner’s, 2007). Each one of these statements has it own unique way of showing where the company’s money came from, where went, and where it is now. This is why it is important to have better understanding how each statement can help keep accurate financial records for the business. Balance Sheet A balance sheet is really an easy concept to understand because when it comes to the balance sheet company’s use them to balance out there financials. This financial statement shows a company’s “assets, liabilities, and share holders equity at certain point of time in a business cycle” (Balance Sheet, 2011). There is a simple equation that can describe the balance sheet which is Assets = Liabilities + Shareholder’s Equity, using this equation company’s should be able to keep accurate records of their finances. Although investors, creditors, and management all look at the balance sheet for reassurance it would seem that the creditors would more interested in the balance sheet because creditors can look at the balance sheet and make a determination on whether or not they are......

Words: 1025 - Pages: 5

Financial Statement Paper

...Financial Statements paper . ACC/290 September 22, 2011 Financial Statements paper Accounting is an action needed by companies in business. Without accounting and the knowledge of the inner workings of financial statements, a business is doomed to failure. In accounting there are four basic financial statements used for an array of reasons. The first financial statement in accounting is the balance sheet. The balance sheet is used to represent an illustration at a point of what a business owns and owes; these are also known as assets and liabilities (Kimmel, Weygandt, & Kieso, 2011). The next statement used is the income statement. The income statement displays just how successful one’s business performance is during a certain period. The income statement basically shows the revenues and expenses of any business (Kimmel, Weygandt, & Kieso, 2011). After the income statement there is the retained earnings statement. This statement indicates how much of a business’s previous income is distributed to owners by way of dividends. It also shows how much income was retained within the organization to allot for future growth (Kimmel, Weygandt, & Kieso, 2011). The last of the four basic financial statements is the statement of cash flow. The statement of cash flow is used to indicate where a business obtained their cash during a period. This statement also shows how the obtained money is used over a particular period (Kimmel, Weygandt, & Kieso, 2011). These......

Words: 824 - Pages: 4