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Financial Statements

A set of financial statements is a structured representation of the financial performance and financial position of a business and how its financial position changed over time.

A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity

It is the ultimate output of an accounting information system and has following 5 components:

1.Income Statement

2.Balance Sheet

3.Statement of Cash Flows

4.Statement of Changes in Equity

5.notes and Other Disclosures

Financial statements are better understood in context of all other components of the financial statements. For example a balance sheet will communicate more information if we have the related income statement and the statement of cash flows too.

The income statement can be prepared in one of two methods.The Single Step income statement takes a simpler approach, total revenues and subtracting expenses to find the bottom line. The more Multi-Step income statement (as the name implies) takes several steps to find the bottom line, starting with the gross profit. It calculates operating expenses and, when deducted from the gross profit, yields income from operations.

Adding to income from operations is the difference of other revenues and other expenses. When combined with income from operations, this yields income before taxes. The final step is to deduct taxes, which finally produces the net income for the period measured 。

In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership, or a corporation . Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year 。

Income Statement -- revenue statement, statement of financial performance, earnings statement, operating statement, or statement of operations) is one of the financial statements of a company and shows the company's revenues and expenses during a particular period Balance sheet 。

Balance sheet lists current assets such as cash in checking accounts and savings accounts, long-term assets such as common stock and real estate, current liabilities such as loan debt and mortgage debt due, or overdue, long-term liabilities such as mortgage and other loan debt. Securities and real estate values are listed at market value rather than at historical cost or cost basis. Personal net worth is the difference between an individual's total assets and total liabilities 。

Financial statements prepared for a period of one year are called annual financial statements and are required to be audited by an auditor (a chartered accountant or a certified public本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。