Running head: FINANCIAL STATEMENTS 1

Financial Statements
XACC/280
FINANCIAL STATEMENTS 2


Financial Statements
I learned how all four of the following financial statements are connected and how they
depict the companys financial status: Balance sheet, retained earnings statement, statement of
cash flows, and income statement. All of these statements show different aspects of the
companys financial standing. They may have overlapping information as well. As a whole they
paint a complete picture of the companys finances.
The income statement single-step approach subtracts expenses from revenues. It contains
the revenues, expenses and the net income. The multi-step approach has several steps which
separate operating, and non-operating activities. Its design is to classify expenses. It allows for
instant and ratio comparisons between the different entries in the income statements.