ACC 290 Week 1 Individual Assignment Financial Statements Paper

May 1st, 2015
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ACC 290 Week 1 Individual Assignment Financial Statements Paper

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Financial Statement ReportACC/290University of PhoenixFinancial statements is a more common term used to refer to statements produced at the end of the accounting periods, such as the income statement, balance sheet, cash flow statement and the statement of owners equity. These four financial statements are sometimes known as the final accounts, which the business prepares. The income statement also known as the trading and profit and loss account is a financial statement, which helps to calculate the gross profit and the net profit of the company for a particular year. Most of the businesses prepare the income statement because they compare revenues with expenses and check the performance. If the revenue exceeds the expenses, the business has earned a profit and vice versa. The information contained in the income statement is not only, but also useful for the internal users of the business such as the managers and owners but however it is also useful for the external users such as government, investors and creditors.For internal users, income statement helps to check the performance and profitability of the business. Owners invest their money merely to earn profits and thus it is necessary for them to check the amount of money they have earned in an accounting period. Similarly, managers status is directly linked with the profitability of the business. If the organization has able to achieve higher profits, managers salary and status often i

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