What Is the Balance Sheet? The Balance Sheet is one of the primary financial statements used in accounting. The Balance Sheet shows a snapshot of a business’s financial position at a point in time. There are two sections: Assets and Liabilities & Equity. Not only does the Balance Sheet show individual and composite account balances, […]
Statement of Comprehensive Income
What Is the Statement of Comprehensive Income? The Statement of Comprehensive Income is a financial statement for items that are not included within Net Income from the Income Statement but nevertheless do affect the equity section of the Balance Sheet. The Statement of Comprehensive Income shows total comprehensive income. The Statement of Comprehensive Income includes […]
What is the Income Statement? The Income Statement, which is sometimes referred to as the Profit and Loss Statement for small businesses, is a document that shows the financial performance of a company over a specific period of time. The Income Statement is used by investors, the company itself, and business analysts. What Is the […]
Qualitative Characteristics of Financial Statements
Financial statements need to be both relevant and faithfully representational. Their utility increases with comparability, verifiability, timeliness, and understandability. Relevance in Financial Statements Financial information is relevant if it can affect financial decision-making. Relevance is affected by its materiality and its nature. Materiality refers to information that if it were omitted or altered would influence […]
These are the organizations that are currently or have previously been responsible for determining exactly what does and does not constitute US GAAP. Body Years Active Notables Securities and Exchange Commission (SEC) 1934 – Present The federal agency responsible for the securities industry. Has prescriptive authority over accounting but largely leaves it to the private […]
