Review of Financial Statements Paper Essay Example | Topics and Well Written Essays - 500 words

reexamine of Financial Statements Paper - Essay ExampleUnder both systems financial statements of both entities play an of import role.Balance Sheet is a statement of affairs of the company on a particular appointment that provides in details the sources of cash in hand for the company and how those sources have applied for by the company. This in fact is an boilersuit financial summary of the company as on a date.The depiction of sources of funds provides an idea as to how the company has mobilized funds in order to meet its objectives. Basically, funds can be organized finished two sources, namely investments by the companys shareholders and/ or through borrowings by the company. Investments by shareholders is the working capital of the owners invested into the company, and held by the shareholders in the shape of shares of a specific value into the total capital of the company, which may be equity or preferential. The distinction of equity and preferential capital has to do wi th allotment of certain precession rights relating to payment of dividend and repayment of capital invested into such shares at the time of liquidation of the company. Further, a balance saddlery describes borrowings as secured and unsecured. Repayment of secured borrowings is insured on the security of certain specific assets whereas unsecured borrowings rights of repayment make out only after the satisfaction of secured loans, and out of left over assets of the company.Balance sheet further describes how funds of the companies have been applied on a particular date on different assets and miscellaneous expenditures that include expenditures deferred over a period of some fiscal periods. Assets may be fixed or current. amend assets are expenditures made by the company that provide benefits to the company over useful life of the assets. That is wherefore only a portion of fixed assets expenditure, called depreciation, is