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Application of Financial Statement
Finance & Accounting
Pages 3 (753 words)
Application of Financial Statement Table of Contents Question1 3 Question 2 4 Question 3 5 References 6 Question1 Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. Both balance sheet and income statement is very helpful in daily life, whether one is trying to keep an eye on his/her expenses or become an intelligent spender.
Income statement would include all the list of expenses such as rent, utilities, car payments, groceries, fuel, entertainment expenses, etc. The person can also analyze the unnecessary expenditures too. It would further assist in organizing the lifestyle of a person and facilitate in ensuring that the bills are paid on time. It would also help in keeping track of the money and check the habit of overspending. Moreover, saving money is encouraged through maintenance of an income statement. Income statement would definitely improve the financial position of any person, as it guides people to manage their daily financial needs and expenditures. Maintaining a well-structured income statement also helps in federal tax purposes. Maintaining accurate records of the incomes and expenditure can also ease the task of tax filings and also supports if there is any possibility of such being audited by Internal Revenue Service department of US. So it can be concluded that those balance sheet and income statement both are important for conducting business, but in everyday life of an individual income statement plays a more important role (Weygandt, Kimmel & Kieso, 2010, p. 21-23). ...
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