Key users of financial statements are lenders and investors, suppliers, customers, employees, government officials, journalists, and politicians. Here's a brief window into all the different ways these statements are used/interpreted.
- Okay, bookkeeping is fun.…Debits and credits, they're the best.…Transaction analysis and posting…are the height of entertainment,…and all of this leads eventually…to the financial statements,…but really, who uses the financial statements?…- Who?…Who, everyone does, or at least everyone…who wants to be informed.…Key users of financial statements are lenders and investors,…the people who provide the capital…to a business so that an entrepreneur…can turn her or his dreams into reality.…- [Man In Blue Shirt] But lenders and investors…aren't the only external users of financial statements.…
For example, suppliers use a company's financial statements.…If I'm going to sell to you on credit,…then I want to know if you're going to be able to pay me.…- So if you're considering entering…into a long-term significant supplier relationship,…where you're going to be selling…on credit to another company,…the first thing you're going to do…is get their financial statements,…do a little analysis just to see…if they're going to be able to pay you back.…
- Identify how a balance sheet reflects the accounting equation.
- Name the account where debits are increases and credits are decreases.
- Define a journal.
- List the three things, in order, that you must address when making journal entries.
- Explain the function of financial statements that is most important for entrepreneurs.
- Assess the purpose of a trial balance.
Skill Level Beginner
1. Review of the Financial Statements
2. Fours Steps in the Bookkeeping Process
3. How Transactions Affect the Accounting Equation
4. The General Ledger
5. Illustration of the First Three Steps in the Accounting Cycle
The role of computers3m 44s
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