1. Some facts related to Financial Statements:-
1. The dates on financial statements are Important?
Financial Statement dates reference a precise period and correspond to one or a collection of
transactions for that date or up to that date specified. Without dates on financial statements, entities
would not be able to calculate or assess a business’ historical or upcoming performance
2. Some items that appear on a company's balance sheet.
On a company’s balance sheet, for example a public company, items are led by several periods of
fiscal years and major categories such as consolidated assets, liabilities, and owners/stockholders’
equity. Under each major category are lists of sub-categories (i.e. Assets/Investment securities at
fair value and Liabilities and Stockholders’ Equity
/Settlement due to members) which distinctly illustrate and compare individual line itemed
monetary figures from different periods; additionally, calculations are displayed as Totals for each
major category. Also, numbered notes may also be referenced on a balance sheet and each note, in
detail, is located in distinguished consolidated notes section of a company’s report.
3. How does a company calculate net income?
A company calculates net income by subtracting expenditures from gross income/revenues.
4. Which statements could be useful in explaining how much cash a company has used or
generated during an accounting period, and why?
Consolidated statements of operations, cash flows, changes in stockholders’ equity, and
comprehensive income are useful in determining the cash a company has used or generated. Each
of these statements, amid others, sum, compare, and contrast the consolidated financial statements
of a company and provides the company, its shareholders, or potential investors assurance of how
monies are expended period after period.