Foundations of Financial Accounting- Financial Reporting

Balance sheets, income statements, and statements of cash flows are accounting reports that show the position of an organization’s financial position in a given time. These reports are prepared during a predetermined period, such as at the end of the year, to assess the financial strength of an organization before and after the period. Organizations may choose to publicize these reports as a way of being accountable to clients, or they may keep them for internal use. The extensive analysis of the above financial reports shows how they are related to their functioning. Do you need urgent assignment help ? Get in touch with us at eminencepapers.com.

Organizations charge their accountants with the mandate to create balance sheets during a pre-determined financial period. The balance sheet helps companies to assess their assets and liabilities and to detect any changes that may have occurred during these periods (Reiter & Song, 2018). In any ideal situation, companies want their assets to exceed liabilities, as this shows they are profitable. Financial reports also comprise income statements in an organization that show how its income and expenses flow within any given period. If the expenses are more than the income in the income statement, this means the organization is not making any profits.

Lastly, firms prepare cash flows during a given period to tell how cash flows in and out; if the cash is more, the company is perceived to be making profits. These financial statements are related because they show how money is used by the organization. The cash flow statement provides details of how funds were used to either offset liabilities or to pay for expenses (Ali, 2020). The balance sheet shows how cash flow money was used to acquire assets that act as sources of income reflected on the income statement. Therefore, the cash flow, income statement, and balance sheets are related, as explained.

References

Ali, A. (2020, June 1). Relationship between financial statements. Accountingo®. https://accountingo.org/financial/statements/relationship-between-financial-statements/

Reiter, K. L., & Song, P. H. (2018). Gapenski’s fundamentals of Healthcare finance (3rd ed.). Foundation of the American College of Healthcare Executives.

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Module 7: Financial Reporting Contains unread posts
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Discussion Forum 7: Financial Reporting

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Foundations of Financial Accounting- Financial Reporting

Your book this week discussed financial reporting, and the balance sheet. Discuss the interrelationship among the income statement, balance sheet, and statement of cash flows.

Write a minimum of 250 and a maximum of 300 words.