Question

Choose one of the financial statements that were covered in this module: The Balance Sheet, The Statement of Operations, The Statement of Changes in Net Assets, or the Statement of Cash Flows. In your own words, explain what important information it provides and why it is necessary. Refer to your chosen topic and reference its relevance. Lastly, can you think of some important information not included on your chosen statement? Why do you think the other financial statements are needed?

In your follow-up post, choose a student's post with an opposing perspective and discuss your position.

Answer 1

Balance Sheet :

Balance sheet is part of financial statement issued by business informing the readers the amount of assets, liabilities and equity held by the entity as of balance sheet date.

The main purpose of balance sheet is to give interested parties an idea of company's financial position. Balance sheet gives a reason to invest in stock of the company.and help current and potential investor better understand where their fund will go and what they can expect to receive in future.

It also helps internally as well as externally to report the company's financial condition. and internally to help manage the company.

A strong balance sheet is having more assets than liabilities. A strong balance sheet are structure to support the entity's business goals and maximise financial performance of the entity.

Balance sheet is also important because this statement let banks know if your business qualifies for additional loans or credit.

other statements are also equally important

like cash flow statement shows how change in balance sheet account and income statement affects cash and cash equivalent.

change in net asset is the rough equivalent of net profit figure on an income statement.