Financial Statements Essay Example | Topics and Well Written Essays - 1000 words

Financial Statements - Essay Example Companies are required file their 10-K annual financial report to the Securities and Exchange Commission. The 10-K is filed within 60 days from the end of the company’s accounting period. The 10-K is the SEC’s standard blank form used by companies for submitting their financial reports. Interested parties can acquire the 10-K Securities and Exchange Commission reports for use in enhancing their investment or divestment decisions (Wild, Shaw, Chiappetta, 2011). Part II: The accounting equation is shown as: Assets = Liabilities + Capital. The assets represent all the resources of the company (Wild, Shaw, Chiappetta, 2011). Example: Assets = Liabilities + Capital $ 250,000 = $ 20,000 + $ 200,000 Assets = $50,000, Accts Receivable $ 50,000. Building $200,000. Liabilities = Accounts payable $ 5,000, Notes payable $ 15,000 Capital = Bush, Capital $ 230,000, Bush, drawing $ 30,000 The company owns the resources. Cash is one of the company’s assets (Wild, Shaw, Chiappett a, 2011). Cash includes the coins and paper money. Cash also includes the checks that are paid by the company’s customers. The assets include accounts receivable. Accounts receivable asset represents the amounts owed by the creditors. Sometimes companies sell their product on account. This means the company delivers their products to the customers. In turn, the customers promise to pay their debts after several days or months. The debt amount is recorded as accounts receivable in the company’s books of accounts. The inventory represents items that are being sold in the company’s stores. The inventory also includes unused office supplies, unused cleaning supplies, and other unused items that are owned by the company. The building...The debt amount is recorded as accounts receivable in the company’s books of accounts. The inventory represents items that are being sold in the company’s stores. The inventory also includes unused office supplies, unused cleaning supplies, and other unused items that are owned by the company. The building account is another company asset. Since the company owns the building, the building is included in the assets account. The office equipment is part of the company’s asset account. The office equipment includes the computers, typewriters, calculators, and adding machines. The company has some liabilities to pay (Wild, Shaw, Chiappetta, 2011). The liabilities represent what the company owes its creditors. Similarly, the suppliers may offer the company credit terms when the company buys goods from its suppliers. In exchange for purchased items, the company promises to pay its debts in a few days or months. When this occurs, the company records an accounts payable amount. Further, when company is required to sign a note promising that they will pay the debt within a few days or months, the company records a notes payable amount in its books of accounts. When the company applies or a ten year ba nk loan, the company records a long term loan amount.