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Q: Discuss how the financial statements would be useful to internal users such as managers and employees.
A: Financial Statements are essential to professional financial reporting. The four basic financial statements are the balance sheet, income statement, retained earnings statement, and statement of cash flow. [ The balance sheet is used to present a picture of what a company owns and will also show the company’s overall liquidity. The balance sheet reports the amount of assets and claims to assets
for a period of time. Assets are items the company owns that could be used if needed to retain cash. The claims to assets are either creditor or owner, which shows up on the stockholders equity section. The creditor would be the individual or company that is using the asset as collateral to a debt. Once debt is paid the creditor releases asset back to owner. The income statement is used report the financial health of the company in a certain time frame. The income statement provides the revenues and expenses in the time frame. ]
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User: Discuss how the financial statements would be useful to internal users such as managers and employees.

Weegy: Financial Statements are essential to professional financial reporting. The four basic financial statements are the balance sheet, income statement, retained earnings statement, and statement of cash flow. [ The balance sheet is used to present a picture of what a company owns and will also show the company’s overall liquidity. The balance sheet reports the amount of assets and claims to assets for a period of time. Assets are items the company owns that could be used if needed to retain cash. The claims to assets are either creditor or owner, which shows up on the stockholders equity section. The creditor would be the individual or company that is using the asset as collateral to a debt. Once debt is paid the creditor releases asset back to owner. The income statement is used report the financial health of the company in a certain time frame. The income statement provides the revenues and expenses in the time frame. ]
Expert answered|BRAINSTORM|Points 1098|

User: Discuss how the financial statements would be useful to external users such as investors and creditors?



Weegy: XTERNAL USERS OF ACCOUNTING INFORMATION What do we mean by external users and who are they? External users of accounting information are individuals and other enterprises that have a current or potential financial interest in the reporting [ enterprise, but that are not involved in the day-to-day operations of that enterprise. External users of financial information may include the following: Owners Creditors Potential investors Labor unions Governmental agencies Suppliers Customers Trade associations General public Each of these groups of external decision makers requires unique information to be able to make decisions about the reporting enterprise. For example, customers who purchase from the enterprise need information to allow them to assess the quality of the products they buy and the faithfulness of the enterprise in fulfilling warranty obligations. Governmental agencies such as the Federal Trade Commission may have an interest in whether the enterprise meets certain governmental regulations that apply. The general public may be interested in the extent to which the reporting enterprise is socially responsible (for example, does not pollute the environment). ]
Expert answered|BRAINSTORM|Points 1099|

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Asked 3/12/2012 9:40:20 AM
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