Research Paper on:
4 Types of Financial Statements

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more information on using this paper properly! Financial statements present summaries of the fiscal data about any organization. The statements are used by a variety of persons, including management,  labor, investors, creditors and government regulatory agencies. Financial statements are constructed for all public companies but they may also be constructed for non-profit organizations, service industries, retailers, wholesalers and even  individuals. The type of business dictates the type of financial statements that are created, including the kind of data that are included (Best, 2001). Public companies are  required by a variety of regulations to submit annual financial statements that include very specific data (Best, 2001). There are four major types of financial statements: * Balance  Sheet - statement of financial position at a given point in time. The accounting model for this statement is: Assets = Liabilities + Equity. Assets are  classified as current or fixed. Current assets are those that can be converted to cash quickly, such as accounts receivable and inventory. Fixed assets cannot be converted so easily,  such as building and equipment. Liabilities refers to what the company owes others, such as loans and wages. Equity refers to stockholders equity, owners equity, if a sole proprietorship or  a partnership. Equity owners have a claim against the company. * Income Statement - The income statement presents the results of the entitys operations during a period of time, such  as one year. The simplest equation to describe income is: Net Income = Revenue - Expenses. Revenue refers to inflows from selling products or services. Expenses  are outflows incurred to produce revenue. * Statement of Owners Equity - also known as Statement of Retained Earnings or Equity Statement. The formula to calculate owners equity is different