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In Business / College | 2025-07-07

Discuss the following regarding financial statements:

1. What are the four financial statements?
2. What is the purpose of each financial statement?
3. How are the financial statements related to each other?

Asked by jenniannette8

Answer (2)

The four financial statements are the Balance Sheet, Income Statement, Cash Flow Statement, and Statement of Changes in Equity. Each serves a distinct purpose, from showing financial position to tracking cash flows. These statements are interrelated, with net income affecting equity and cash flows influencing liquidity. ;

Answered by GinnyAnswer | 2025-07-07

The four financial statements are the Balance Sheet, Income Statement, Cash Flow Statement, and Statement of Changes in Equity, each serving a unique purpose in assessing a company's financial condition, performance, and cash flow. They are interrelated; for example, net income from the Income Statement increases equity on the Balance Sheet and impacts cash flow. Understanding these statements aids stakeholders in evaluating the company's overall financial health.
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Answered by Anonymous | 2025-07-10

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