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These statements determine how profitable a business is. They also give a synopsis of both long term and short term financial conditions. The four basic financial statements are as follows: balance sheet, income statement, statement of retained earnings and a statement of cash flows. The balance sheet is responsible for presenting companies current assets and liabilities. Examples of Assets are "cash, cash equivalent; assets held for collection, sale, or consumption" (Deloitte) Liabilities "are those to be settled within the enterprise's normal operating cycle or due within 12 months, or those held for trading, or those for which the entity does not have an unconditional right to defer payment beyond 12 months" (Deloitte) A corporations profit or loss is included in the income statement...
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