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Chapter 2

Is the process of reviewing and analyzing a companys financial statements to make better economic decisions to earn income in future.

Financial Statement Analysis

Sometimes called a profit-and-loss statement by users like management personnel or a board of director.

Income Statement

Is a financial statement that shows how cash entered and exitee a company during an accounting period

Cash Flow Statements

Referred to as a cash flows, and accountantd use these statements to record, track, and report these transactions.

Cash Coming in and out of a Business

Refers to a financial statement that reports a company's assets, liabilities, and shareholder equity at a specific point in time.

Balance Sheet

Disclose the detailed assumptions made by accountants when preparing a company's income statement, balance sheet, statement of changes of financial position or statement of retainwd earnings.

Notes to the Financial Statements

One way to break down the concept of notes to financial statements is to view them as a medium to communixate information about the aspects of a company.

Breaking down the financial Statement Notes

Is the reconciliation between the opening balance and closing balance of shareholders equity.

Statement of Changes in Equity

Is a business financial statement that measures the changes in owners equity throughout a specific accounting period.

Statement of Retained Earnings

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