What are the major financial decisions and how they are extracted from accounting equation?
Answers
The information found on the financial statements of an organization is the foundation of corporate accounting. This data is reviewed by management, investors, and lenders for the purpose of assessing the company's financial position.
Data found in the balance sheet, the income statement, and the cash flow statement is used to calculate important financial ratios that provide insight on the company’s financial performance and potential issues that may need to be addressed. The balance sheet, income statement, and cash flow statement each offer unique details with information that is all interconnected. Together the three statements give a comprehensive portrayal of the company’s operating activities.
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Answer:
The information found on the financial statements of an organization is the foundation of corporate accounting. This data is reviewed by management, investors, and lenders for the purpose of assessing the company's financial position.
Data found in the balance sheet, the income statement, and the cash flow statement is used to calculate important financial ratios that provide insight on the company’s financial performance and potential issues that may need to be addressed. The balance sheet, income statement, and cash flow statement each offer unique details with information that is all interconnected. Together the three statements give a comprehensive portrayal of the company’s operating activities.
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