ACC 250 Week 6 - DQ 1 - 7393

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3number
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Request Description

The balance sheet lists assets, liabilities, and equity/capital of a business for a specific date.  This statement is used to determine the company’s financial position.

 

The gross profit by departments details each department’s year-to-date gross profit.  This is a custom report for one of the sample companies and is used to determine the cost effectiveness of a department’s activities and evaluate profitability.

 

The income statement summarizes revenues and expenses a company accrues over a period of time.  This statement is used to determine how well sales are going, if expenses need to be cut, and if the company has made a profit.  This statement can also be used as a budgeting tool and to determine what time of the year a company has a slow period.

 

 The statement of cash flow summarizes the effects of the operating, investing, and financing activities of a company on cash for a period of time.  This statement is used to determine were cash is coming from and how it is being spent.

 

The statement of retained earnings shows beginning and ending retained earnings amounts, adjustments made to retained earnings within the period, and the detail for all Equity-gets closed accounts, such as dividends paid.  This is the report I have the hardest time understanding and I guess it would be used to see how well capital is growing and to determine when and if dividends should be paid.

 

The statement of changes in financial position shows changes in a company’s financial position that may not be apparent in other statements.  It shows changes in working capital, liabilities, and assets for a given time period.  This is another report that I have not had to work with; therefore, I do not fully understand how it would be used.  I do believe that it would be used to help in further developing a budget or as a broader tool for decision making.

 

All of these statements in some way correlate with each other therefore; the information in them must be accurate as they are used in making decisions that could cause a company to go bankrupt.  The information also needs to be accurate because these statements are used in planning budgets and by outside users to determine things like whether or not a company is able to pay back a debt.

Solution Description

The balance sheet lists assets, liabilities, and equity/capital of a business for a specific date.  This statement is used to determine the company’s financial position.

 

The gross profit by departments details each department’s year-to-date gross profit.  This is a custom report for one of the sample companies and is used to determine the cost effectiveness of a department’s activities and evaluate profitability.