The Four Financial StatementsEssay Preview: The Four Financial StatementsReport this essayThe Four Basic Financial StatementsThe Balance sheet, Income Statement, Retained Earnings Statement, and Statement of Cash flows are the four basic financial statements used in accounting. They contain a companys assets, liabilities, expenses, and revenues in a format that internal and external users like investors, managers, creditors, and employees can use to analyze and assess the financing, investing, and operating activities of a company.
The Income StatementAccounting uses the income statement to report a companys net income or net loss for a period of time. It does this by subtracting the companys expenses from its revenues. If the companys expenses are less than its revenues it will report a net income. If its expenses are more than its revenues, it reports a net loss. The income statement is useful to investors because they belief it provides useful information that they can use to predict the future success or failure of a companys performance. Investors are more likely to buy a companys stock (invest in it) if they belief that a future successful performance will increase the companys stock value. Banks also use this information to predict the likelihood that a company will repay a loan.
Retained Earnings StatementAccounting uses the retained earnings statement to show the amounts and causes of changes in a companys retained earnings during a specific period. The net income retained is a companys retained earnings. It does this by adding any retained earnings from previous periods to the difference between the current net income and the amount of dividends paid during the same period. Financial statement users can evaluate the dividend payment practices of a company by looking at the retained earnings statement. Investors can choose from dividend paying companies or non-dividend paying ones. Lenders like banks, use the retained earnings statement to monitor dividend payments because any money paid in dividends reduces a companys ability to repay its debts.
The Balance SheetAccounting uses the balance sheet to report a companys assets and claims to assets for a specific period of time. Claims to assets are sub-divided into Liabilities (claims of creditors) and stockholders equity (claims of owners). The balance sheet gets its name from the fact that assets are equal to the sum of liabilities and stockholders equity: assets=liabilities + stockholders equity. This equation is known as the basic accounting equation. Creditors use the information contained in a companys balance sheet to assess the companys likelihood to pay its debts. Creditors also evaluate a companys debt to stockholders equity to determine if a company has satisfactory proportion of debt
The Balance SheetAccounting uses the balance sheet to report a companys assets and claims to assets for a specific period of time to provide a representative sample of assets. Assets and claim information was updated to conform to the Bank of Canada’s Guidelines on Financial Reporting of Financial Institutions (CFRF) 2014 and a compliance date has been set for the 2013 financial year. The accounts used in these credit reporting audits are maintained by the CFRF for use in the Bank of Canada’s financial statements. To determine the CFRF standards, please see our CFRF Standards (PDF). The CFRF Guidelines are the current standard, which will be updated in the following year. All CFRF credit and debt audit products, including the Bank of Canada’s Financial Responsibility (BRI) 2014, use the CFRF’s standard (PDF) for reporting. For information about what CFRF has to say about our policies, practices, and practices, see the CFRF Policy Report, “Asset Reporting,” “CFRF Standards and CFRF Policy,” and “Financial Statement Audit Practices” (PDF). To view this document with relevant documents, you need to use another web browser.
The Finance Creditors will be responsible for carrying out audits, and the Financial Accounting Oversight Body (FABO) will conduct financial reporting audits. To view information about the compliance of accounting companies or the reporting and audit of companies or departments, visit www.financialaccounting.gc.ca.
3. What is the Financial Measures of Financial Reporting
In addition to keeping records pertaining to the management’s financial statements, the Financial Measures of Financial Reporting are the following:
The Basis of Annual Report and Financial Statements (GAAP). The GAAP measures the overall amount of company revenue to shareholders. The GAAP measure provides measures of future business performance and the quality and integrity of a company. The GAAP measures a company’s net income of $5.5 billion, adjusted for its financial condition: revenue as a percentage of consolidated net sales from $1.4 billion to $3.3 billion, plus certain items, based on data and information provided by a third party and non-GAAP source, including consolidated financial statements. GAAP is a measure of operating performance that includes changes that will affect the company results of operations, including in the following areas; management’s business: performance as of November 30, 2013 for the first quarter and 2013 for the second quarter of fiscal year 2013 including results of operations for the fourth Quarter of fiscal year 2012. Adjusted R&D and other cost of revenue (other than net income) decreased by about $2.4 billion compared to 2011, primarily in the fourth quarter of fiscal year 2013.
in the fourth quarter of fiscal