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Financial statements - Research Paper Example
Author : krystina92
Finance & Accounting
Pages 4 (1004 words)
Financial statements Grade Course (27th, April. 2013) The relationships between the income statement, balance sheet, and statement of cash Financial statements refer to the records that show the financial transactions of any given organization, dependent on the direction in which the transaction goes (USEC, 2007)…
The documents that constitute the financial statements include the balance sheets, income statements, cash flow statements and the statements of shareholders’ equity (Sinha, 2007). There are some aspects of relationship between these financial records. The three financial records are used to show the financial situation of the company. First, a balance sheet is a financial statement that is used to show what a company owns and what it owes to others, in terms of the assets and the liabilities of the company (USEC, 2007). The income statement is used to show the amount of money that the organization made and how much money it spent within a given financial period, which could range from monthly, to quarterly or annually. On the other hand, the cash flow statements serve to indicate the monetary exchanges that an organization has had with the outside world, within a specified duration of time. The similarity in all these financial records is that they serve to indicate the financial situation of the organization after its interaction with the other stakeholders, in terms of assets, revenues, liabilities and expenditures (Wahlen, Bradshaw, Baginski & Stickney, 2010). ...