Accountants are responsible for preparing three primary types of financial statements of a company. The
income statement shows the profit-making activities of the company and
the profit or loss of the bottom line for a certain period. Balances reports on the financial situation of the company at a specific point in time , ofteh the last day of the period. and statement of cash flows reports how much cash was generated cash benefits that have done business with that money.
Everyone knows profit is a good thing. This is what our economy is based on . Does not sound like much. Earn more money than you spend to sell or manufacture products . But, of course , nothing is ever really simple, right? A report profit or net income statement first identifies the company and the period are summarized in the report .
You read a statement of income for the first line of the bottom line. Each step in the income statement shows the deduction of an expense . The income statement also reports changes in assets and liabilities, as well , so if there is an increase in income, or because there was an increase in assets or decrease in liabilities of the company . If you have had an increase in expense line , it is because there has been no decrease in assets or an increase in liabilities .
Equity is also known as the capital of the company. They are not exactly interchangeable. Net worth expresses the total assets less liabilities. Capital refers to the owner who owns the assets after liabilities are satisfied .
These changes in assets and liabilities are important to owners and managers of a company as it is their responsibility to manage and control these changes. Making a profit in a business involves many variables, not only increased the amount of money that flows through a company, but the management of other assets too .
Everyone knows profit is a good thing. This is what our economy is based on . Does not sound like much. Earn more money than you spend to sell or manufacture products . But, of course , nothing is ever really simple, right? A report profit or net income statement first identifies the company and the period are summarized in the report .
You read a statement of income for the first line of the bottom line. Each step in the income statement shows the deduction of an expense . The income statement also reports changes in assets and liabilities, as well , so if there is an increase in income, or because there was an increase in assets or decrease in liabilities of the company . If you have had an increase in expense line , it is because there has been no decrease in assets or an increase in liabilities .
Equity is also known as the capital of the company. They are not exactly interchangeable. Net worth expresses the total assets less liabilities. Capital refers to the owner who owns the assets after liabilities are satisfied .
These changes in assets and liabilities are important to owners and managers of a company as it is their responsibility to manage and control these changes. Making a profit in a business involves many variables, not only increased the amount of money that flows through a company, but the management of other assets too .
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