Financial Statement – Who Needs It?

Financial Statement - Who Needs It?

The Financial Statement for your business is probably the single most referred to report that your company will produce. It comprises several other documents including the Balance Sheet and the Profit and Loss statement and provides all of those looking for a complete financial picture of your business with a detailed account.

So, who actually uses the information in a financial statement? Which groups of people find such things essential and why?

Owners & Managers
First and foremost you will need the information yourself as the owner of the business without the information in a financial statement it would be very difficult to make any important business decision. Read more

How to Make a Financial Statement

Financial Statements are used to find the financial health of a company or of an individual. Financial statements for companies and firms are usually prepared by Certified Public Accountants (CPAs). It does not hurt to understand what goes into the work for a financial statement to give you a good idea of your company’s financial health. There are four basic statements to be considered, Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of cash flow.

The Balance Sheet also referred to as statement of financial position or condition, reports on Assets (anything of value), liabilities (anything owed to others) and Owner’s equity. Read more

How to Evaluate an Income Statement as an Effective Financial Tool

    The Main Characteristics of Income Statements Prepared According to GAAP Rules

     

    If youre in the process of evaluating your Income Statement and how it measures to the GAAP Rules for standards of reporting, be informed that there are four fundamental principles that every Income Statement should possess: relevance, reliability, consistency and comparability of financial information presented.

    Relevance The matter of relevance may refer not only to the usefulness of the information provided but also to the manner of organizing the data according to its most significant value, as a tool for making informed decisions. Read more

The Importance of the Matching Principle in Accounting

The Importance of the Matching Principle in Accounting

    Where Did the Matching Principle Come From?

      The matching principle is part of Generally Accepted Accounting Principles (GAAP). The standards are developed and overseen by four main organizations. They are the Securities and Exchange Commission (SEC), the American Institute of Certified Public Accountants (AICPA), Finanal Accounting Standards Board (FASB) and Government Accounting Standards Board (GASB).

    The SEC was created by the federal government as a means of establishing standards for financial reporting. Read more