Financial Statement Paper

Financial Statement Paper

Accounting consist of three basic activities, it identifies, records, and communicates the economic events of an organization to interested users. Accounting is also the financial information that provides these insights, in helping the community to understand their organization; it helps you understand the numbers. In this paper I am going to define the purpose of accounting and identify the four basic financial statements, and how they are interrelated with each other; and why they are useful to managers, investors, creditors and employees.

The United States securities and the exchange commission financial statements can be produced in a large variety of forums, at which serves a very wide range of purposes in determining our economic viability of an organization in a whole. A balance sheet will demonstrate a company's assets, liabilities, and shareholders' equity. These would be an item that the company has that has some monetary value to it. The second item would be the income statement, which would demonstrate loss over a period of time within the company's organization. The third thing would be cash flow at which demonstrates the flow of money through the organization.

The Investors are the most important stakeholder in an organization; the investors are those who look at the financial statements in detail to determine whether or not the investment will give good returns. The company's balance sheets should show a positive in order for the investors to invest their money. The investors may also take a good look at other statements in order for them to make a more informed decision. For example a small company investor may want to take a look at the company's income statement to determine whether or not investment would be worthwhile.

Home depot, Nike, and the federal bureau of investigations all wanted to know how accounting