Tabitha Smith
ACC 280
November 15, 2010
James Gajda

Accounting is said to be a means of communicating numbers, it consists of three basic activities; identify, record, and communicate the electronic events of an organizations for those interested users. In accounting in order to identify economic events the company selects an economic event relevant to the business. Once that information is collected it is turned into records, which consists of forming the collected information into systematic chronological diary of events that is measured in dollars and cents. Once that information is gathered it is turned into the process of communicate, which is a means of turning the information into accounting reports for interested users.
The most common means of account reporting is financial statements, this means reports that are standardized, or reporting information as one amount of data. Basically financial statements are a means of organized numbers combined into one to give a whole amount. However, in order to properly give information an accountant must be able to analyze and interpret all the information that was given. There are four types of financial statements, each one gives different but vital information and all four of these are important in the accounting department of a business.
The first financial statement is the income statement; it reports the success or profit of the company’s operations over a specific period of time. First listed on the income statements is revenues, then expenses, finally net income or net loss. Basically when revenues are greater than expenses it the result is net income, however when expenses exceed revenues it is considered a net loss. The income statement however does not include investment and dividend transaction between stockholder and the business. This statement would be particularly useful for employers, this way they are able to keep an organized means of all spending, also...