Financial Statement Accounts
Respond to the following in a minimum of 175 words:
The three primary financial statements tell us important and different things about a business. The
balance sheet tells us about a company’s resources and claims on those resources, the income
statement measures a company’s financial performance for a period of time, and the statement of cash
flows reports the cash inflows and outflows of a company by category.
You and your business partner have been running your company for one year now—long enough for
your accountant to prepare a complete set of financial statements for your review. Your business
partner maintains that everything she needs to know about the business is contained in the balance
sheet, the statement of cash flows, and the income statement.
As a business owner, discuss at least one item (account) reported on the income statement that would
help you make decisions about future business operations. In addition, choose 1 of the questions below
to answer based on your response:
What are two items (accounts) from the balance sheet that you would track on a regular basis?
Why?
What are two elements on the statement of cash flows that you and your business partner
would find informative and useful as decisions about the future are made?