Ask A CPA - Financial Statements

What Are The Basic Financial Statements?

Financial statements are the principal means of reporting financial information to people within an organization. This includes the management and employees, as well as those outside the business, such as investors, banks, suppliers and others. Publicly traded corporations must comply with strict specific requirements for financial statement reporting. The requirements are stated in the Generally Accepted Accounting Principles. Non-publically traded corporations usually do not need audited financial statements unless required for bank loans. The basic 4 financial statements are the Balance Sheet, the Income Statement, the Statement of Retained Earnings and the Statement of Changes in Financial Position. Often the Statement of Retained Earnings is combined with the Income Statement. Following the financial statements are the Notes to financial statements which are an important source of information on the accounting policies, procedures, calculations, and transactions underlying entries in the financial statements. Speak to your local CPA about your Financial Statement needs

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