ACC 290 Week 1


Week 1 DQ1

What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why.


Week 1 DQ2

How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors?



What are debits and credits? How are debits and credits used to record business transactions?  Why do accountants debit asset accounts to increase them but credit liability accounts to increase them? Why do accountants debit expenses to increase them but credit revenues to increase them?


ACC 290 Week 1 Individual Assignment Financial Statements Paper


Prepare a 700 -1,050 word paper in which you identify the four basic financial statements.  Describe the purpose of each of the four financial statements. Discuss how the financial statements would be useful to internal users, such as to managers and employees.  Discuss how the financial statements would be useful to external users, such as investors and creditors.  Format paper according to APA standards.



Week 1 summary attached as well


ACC 290 Week 1,



The four basic financial statements are income, retained earnings, balance, and statement of cash flows. Financial statements provide a means for the business to judge the results of their operational or financial performance over a period of time. Income statements provide investors and the business a description of how profitable the business is performing within a specific period in time. Retained earnings are income that is left in the company (reinvested) that was not distributed to the stockholders. This statement explains why the



Financial statements alert investors of the risk that is involved in investing in the company. The information from these reports also allow investors to judge what type of return they will receive on their investment and it also helps them to determine whether to hold, buy, or sell. Creditors are concerned with any statistical financial information that helps them to determine the financial stability of the organization and whether the business will repay the loan…..



A debit is an asset or increase in cash (left column). Debits normally increase assets and decrease liabilities and credits normally decrease assets and increase liabilities. A credit is a decrease in cash (right column). Debits and credits are used to record business transactions by the type of account that is used. Expense and assets are increased on the debit or left side and liability equity and revenue accounts are increased on the credit side. Every transaction


assignment 1-

Financial statements is a more common term used to refer to statements produced at the end of the accounting periods, such as the income statement, balance sheet, cash flow statement and the statement of owner’s equity. These four financial statements are sometimes known as the final accounts, which the business prepares.

The income statement also known as the trading and profit and loss account is a financial statement, which helps to calculate the gross profit and the net profit of the company for a particular year. Most of the businesses prepare the income statement because they compare revenues with expenses and check the performance. If the revenue exceeds the expenses, the business has earned a profit and vice versa. The information contained in the income statement is not only, but also useful for the internal users of the business such as the managers and owners but however it is also useful for the external users such as government, investors and creditors’.

For internal users, income statement helps to check the performance and profitability of the business. Owners invest their money merely to earn profits and thus it is necessary for them to check the amount of money they have earned in an accounting


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