Finicial Statement

Financial   Statements
Penny Levalley
                                                      July 6, 2010
University of Phoenix
                                            Instructor: Mr. Peter B. Marik

Financial   Statements


    What are Financial Statements and how do they work for us as an accountant?   I will try to explain the concepts of the statements that are involved in the accounting field and how they do work for us in keep track of the flow of coming in and going out. There are other forms that are used to keep track of everything and they each have a purpose.
    To answer what are Financial Statements, “Financial Statements are records that provide an indication of an individual’s organization’s financial status.” (Wise Geek) There are four types of forms that are used in every business to report information in the form of a financial statement that are used periodically to report the funds that come in, go out and were they are now.
One form is called the balance sheet. This form is based on the certain elements such as assets, liabilities and equity. Assets are based on either current assets or fixed assets. The current assets are classified the quick and easy way to convert into cash. Current assets include cash, accounts receivable, marketable securities, notes received, and inventory. Prepaid assets are insurance that the company pays. Fixed assets are land, buildings, and equipment. This is also things that cannot be touched but exist and have value, such as trademarks and patents. Cash itself is an asset to the company for investments and what the company makes.( Beginners’ Guide to Financial Statements, Four Financial Statements)
Liabilities are amounts of money that a company owes to others. Like the money the company has borrowed from a bank or finace company to launch a new product, or the rent of the building being used, and money owed to a...