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Friday, 4 May 2012

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Financial Statements

Financial statements are general purpose, external financial statements prepared according to generally accepted accounting principles. Some terms that apply to the financial statements include: balance sheet reports the amounts of assets, liabilities, and stockholders’ equity at a specified moment, such as midnight of December 31; also known as the statement of financial position. income statement reports revenues, expenses, gains, losses, and net income during the period of time stated in its heading; also known as the statement of operations and as the profit and loss (P&L) statement. statement of cash flows reports the changes in cash and cash equivalents during a period of time according to three activities: operating, investing, and financing. statement of stockholders’ equity reports the changes in the components of stockholders’ equity, including net income, other comprehensive income, dividends, exercise of stock options. interim financial statements issued between the annual financial statements, e.g. quarterly audited financial statements independent CPA firm gives assurance about reasonableness and compliance with accounting principles. financial reporting includes financial statements, annual and quarterly reports to SEC and stockholders, press releases and other financial reports.


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