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Financial Statement Differentiation Paper

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Financial Statement Differentiation Paper
Set Jardine
Acc 561

Financial Statement Differentiation Paper Financial statements are prepared by every public company according to the generally accepted accounting principles adapted by the United States to ensure accounting accuracy within the investment community. These accounting standards are used to prepare the balance statement, the income statement, the shareholders’ equity statement, and the cash flow statement. This paper will discuss the differences between each of these statements.
Balance Sheet Shareholders’ equity, liabilities, and assets are items listed on the balance sheet. Assets are the items that the company owns that have value. Liabilities are debts that the company is obligated to pay. Shareholders’ equity is the net worth of the company. The balance sheet is an overview of the company’s accounts during the financial period depicted on the statement.
Income Statement The income statement is the company’s statement of profit and loss. This statement will show the company where money was either gained or lost during operations. There are several versions of the income statement, depending on the size of the company. Generally, though, the sections in the income statement consist of revenue, cost of goods sold, operating income minus expenses, pretax income, extraordinary items, income available for common stockholders, adjusted net income, and earnings per share.
Cash Flow Statement The cash flow statement tells the story of the cash within the company. Where the cash is earned or lot. There are three sections to the cash flow statement: operating activities, investing activities, and financing activities. The cash flow statement is not on its own, this statement is interrelated with the balance statement, the income statement, and the statement of shareholder’s equity.…...

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