Accounting Financial Statements

Accounting Financial Statements

Accounting Financial Statements
Businesses report financial information to the GAAP on a periodic basis in the form of four different financial statements.   The four financial statements are the income statement, the balance sheet, the retained earnings statement, and the statement of cash flow.   These financial statements provide required information to various groups involved in the business or organization including investors and creditors.   They also provide relevant information to the employees and the management staff in any organization.   These statements are not provided, especially for one particular group, all are intended to be of equal value so are created neutral.   Each financial statement provides a summary of varying transactions or events that occur in a business to its viewers so each require different information to complete.  
The income statement is a summary of the businesses operations including information about expenses paid and revenues generated.   The main purpose of the income statement is to report how much the company earned or lost during the specific period.   All income statements should include certain items essential in its completion including revenues and expenses.   Revenues include inflows of cash and any enhancements made to assets.   Expenses reported on the income statement are not limited to the following:
? Costs of goods sold (COGS), which includes all direct costs related to the development of the products or service such as direct labor, material costs, and overhead costs.
? Selling expenses such as salaries of salespeople, freight costs, advertising costs, and travel expense.
? General and administrative expenses that involve expenses needed to manage the business such as executive’s salaries, legal fees, office rent, and office supplies.
? Depreciation and amortization are the allocation of costs related to fixed and allocated assets.
? Research and development costs are expenses related to the research and...