ACC 290 Financial Statements PAPER

Financial Statements Identify the four basic financial statements The four basic types of financial statements are balance sheet, income statement, statement of owner’s equity, and lastly statement of cash flow ("The Four Financial Statements", 1999-2010). Describe the purpose of each of the four financial statements. A balance sheet is used to summarize the finances of a company during a specific period of time. The sum of company’s liabilities and the owner’s equity should be equal the assets and finding the balance between the two is why this report is called a balance sheet. An explanation of the components of a balance sheet could be: Assets = Liabilities + Equity ("The Four Financial Statements", 1999-2010). An income statement is a representation of company’s profit or loss. The statement includes figures from sales and expenses. The difference between revenue and expenses is the company’s net income. An income statement is usually compiled monthl...

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