Question

Requirement 1: Type your name and the financial statement in the title to obtain credit, Requirement 2: Discuss 2 of the 4 basic financial statements, specifying uses and at least two examples how managers may use the 2 statements. Make sure that your example is unique from any posts before yours to obtain credit, and Requirement 3: Give feedback to 1 classmate. Each learner should have 3 posts: 2 separate post to discuss 2 financial statements and 1 posts for feedback to one other learner.

Answer 1

*4 basic Financial statements are: 1)Balance sheet, 2)Income statement, 3)Cash flow statement, 4)Statement of changes in equity.

*Uses of above Financial statements

1)The purpose of the balance sheet is to reveal the financial status of a business as of a specific point in time. The statement shows what an entity owns (assets) and how much it owes (liabilities), as well as the amount invested in the business (equity).

2)You use an income statement to track revenues and expenses so that you can determine the operating performance of your business over a period of time. Small-business owners use these statements to find out what areas of their business are over budget or under budget.

3)The purpose of the cash flow statement is to show where an entities cash is being generated (cash inflows), and where its cash is being spent (cash outflows), over a specific period of time (usually quarterly and annually). It is important for analyzing the liquidity and long term solvency of a company.

4)The statement of changes in equity shows the change in an owner's or shareholder's equity throughout an accounting period. Also called the statement of retained earnings, or statement of owner's equity, it details the movement of reserves that make up the shareholder's equity.

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