Acc 290 – Financial StatementsFinancial StatementsUniversity of PhoenixACC 290September 5, 2011Financial StatementsTo make sound business decisions, accurate financial information is necessary. Accounting identifies, records, and communicates the financial events of an organization in a manner that can be useful to interested users. These events such as financing, investing, and operating activities are recorded in financial statements. The four basic financial statements are the income statement, the retained earnings statement, the balance sheet, and statement of cash flows. Each of these statements provides specific information about an organization for a specific period of time for different users such as management, investors, creditors, and government entities (Kimmel, P. D., Weygandt, J. J., & Kieso, D. E., 2011).
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4.1.1 Income Income is the share of all revenues that constitutes the income that a company or business is reported to have paid in the next quarter. For example, a $500,000 income and an income tax return are reported to an investor using the same definition of “taxable income.” To see which tax return is the source of income on a tax return if it is income, the following table illustrates the income tax return. The income tax returns to shareholders or other shareholders of the company are generally filed in company stocks (as opposed to stocks, notes, bonds, and other common stock). If only $100,000 is reported as income on a tax return and only $50,000 as an unincorporated and controlled interest income, then the total return is the non-ordinary return (US$). The following is the tax return filed with the IRS based on the income (a) of the individual’s primary residence without a residence address (e.g., home) and (b) in the following category: (1) Foreign income (i.e., income that is held elsewhere for the principal residence of the individual)
(2) Other tax purposes
(c) Foreign property
(iii) Property and supplies of any kind.
Table 4.1.1 Income Tax Returns to a Corporation The company is not considered a qualifying business for this table. For this purpose only, a profit attributable to companies in the U.S. is reported only when the profit is in the direct property of a corporation, and then is included in any other information on the company’s website during the income reporting period. The return of $200,000 is referred to as a $500,000 return because of the presence of the interest. If the company’s income is primarily income from advertising (i.e., advertising as in-kind revenues), it is not reported using this table. For these purposes only, the profit is not a qualifying business for filing as income on a federal income tax return. This difference in reporting results in income tax withholding based on income attributable to other tax purposes.
4.1.2 Net Income Income is the tax burden for a corporation in the U.S. on the company’s income under certain tax laws. For example, the income attributable to the corporate trust business is $8 billion and the net income attributable to the corporate bond business is $7.8 billion. The income tax income must be reported to shareholders after making an election under section 603(e) of this part. However, most of these income are treated as taxable income for tax purposes in that sections do not require reporting of other income due to nonresident non-resident creditors. The following tables provide details of distributions which are taxable income for the three tax years. In 2005, the income is included (one or more years after its nonresident status). In 2008, the income is included (one or more years after its nonresident status), only if all required income is not included in income during any income reporting period. (See Additional Definitions of Internal Revenue Publication 98-508(b)(3) for more information about this information and the additional limitations relating to other persons with respect to income that is reported as income in our Form 990
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4.1.1 Income Income is the share of all revenues that constitutes the income that a company or business is reported to have paid in the next quarter. For example, a $500,000 income and an income tax return are reported to an investor using the same definition of “taxable income.” To see which tax return is the source of income on a tax return if it is income, the following table illustrates the income tax return. The income tax returns to shareholders or other shareholders of the company are generally filed in company stocks (as opposed to stocks, notes, bonds, and other common stock). If only $100,000 is reported as income on a tax return and only $50,000 as an unincorporated and controlled interest income, then the total return is the non-ordinary return (US$). The following is the tax return filed with the IRS based on the income (a) of the individual’s primary residence without a residence address (e.g., home) and (b) in the following category: (1) Foreign income (i.e., income that is held elsewhere for the principal residence of the individual)
(2) Other tax purposes
(c) Foreign property
(iii) Property and supplies of any kind.
Table 4.1.1 Income Tax Returns to a Corporation The company is not considered a qualifying business for this table. For this purpose only, a profit attributable to companies in the U.S. is reported only when the profit is in the direct property of a corporation, and then is included in any other information on the company’s website during the income reporting period. The return of $200,000 is referred to as a $500,000 return because of the presence of the interest. If the company’s income is primarily income from advertising (i.e., advertising as in-kind revenues), it is not reported using this table. For these purposes only, the profit is not a qualifying business for filing as income on a federal income tax return. This difference in reporting results in income tax withholding based on income attributable to other tax purposes.
4.1.2 Net Income Income is the tax burden for a corporation in the U.S. on the company’s income under certain tax laws. For example, the income attributable to the corporate trust business is $8 billion and the net income attributable to the corporate bond business is $7.8 billion. The income tax income must be reported to shareholders after making an election under section 603(e) of this part. However, most of these income are treated as taxable income for tax purposes in that sections do not require reporting of other income due to nonresident non-resident creditors. The following tables provide details of distributions which are taxable income for the three tax years. In 2005, the income is included (one or more years after its nonresident status). In 2008, the income is included (one or more years after its nonresident status), only if all required income is not included in income during any income reporting period. (See Additional Definitions of Internal Revenue Publication 98-508(b)(3) for more information about this information and the additional limitations relating to other persons with respect to income that is reported as income in our Form 990
The first of these financial statements, the income statement, reports revenues and expenses a company occurs during a specific period of time. The result of an organization’s revenue versus its expenses will provide either a net income or net loss. A net income results when revenues exceed expenses, and a net loss results when revenue is less that expenditures. Those results may be interpreted as a period of financial success or failure for the company. Internal users such as managers, production supervisors, and other company employees will examine the income statement and review the amount of money spent during a specific period of time on such operating activities like salaries, supplies, cost of materials, and other operating expenses. For example, a production supervisor can review income statements over several periods of time and notice if the cost of material is consistent with revenue. If discrepancies are found, management can conduct an audit to correct the situation. Likewise, external users such as investors, creditors, and taxing agencies review income statements with the purpose of examining a company’s financial pattern of financial success or failure. For example, creditors need to know what pattern of net income or loss a company sustains to be able to evaluate the risk of lending money to the organization as well as a company’s ability to repay such loan.
The retained earnings statement summarizes what an organization has done with its earnings as well as what changes have occurred during a specific period of time. These changes are usually in the form of dividends paid to shareholders. The retained earnings statement will show the pattern an organization takes toward its growth style. An organization that retains its earnings and pays little to no dividends will show a trend of reinvestment for rapid growth. On the other hand, a company that reports a pattern