First blank options: Statement of retained earnings // Balance Sheet // Income S

Question

First blank options: Statement of retained earnings // Balance Sheet // Income Statement // Statement of cash flows

Second blank options: Period of time // Given point of time

Third blank options: revenues and expenses // assets, liabilities, and equity // sources and uses of cash // changes in retained earnings

Fourth blank options: revenues and expenses // net income (loss) // ending retained earnings // dividends // total assets // cash balance

7. Relationships between the financial statements Aa Aa Financial statements provide information that is used for making decisions. There are four basic financial statements. This problem is designed to help you understand the purpose of each statement and how the statements interac. There is a natural progression from one statement to the next. The following boxes represent the four financial statements. The set of financial statements is prepared at the end of each accounting period to communicate information about the company's operations during that period to its users. Use the selection lists to demonstrate your knowledge of the relationships between the statements. In the headings, you will need to select the appropriate statement name and time period. (Hint: Ask yourself if the statement covers a period of time or if it is a snapshot at a given point in time.) Then complete the blanks following the headings. Statement 1 ABC Company This statement shows how profitable a company is. It is sometimes referred to as the profit and loss (P&L) statement. This statement summarizes the which item from this financial statement statement? appears on the next financial Statement 2: ABC Company This statement shows how much, if any, of the net income is distribubed to the owners. It is sometimes expanded to show changes to al equity items. This statement summarizes the which item from this financial statement statement? appears on the next financial Statement 3: ABC Company This statement reflects the accounting equation. It is sometimes referred to as the statement of financial position. This statement summarizes the which item from this financial statement statement? appears on the next financial Statement 4: ABC Company This statement is created using information from two other financial statements. Therefore, it is created ast. This statement summarizes the

Explanation / Answer

Hi,

As the statement 1 suggets how profitabe a company is hence it is "Income Statement"

Income Statement occutrs for a "period of time"

It summarize "revenues and expenses"

From Income Statement "Net Income" will go to ending retained earning.

Statement 2:

Statements 2 says change in equity hence it will be "Statement of retained earnings"

Statement of retained earnings is at a "given point of time"

It summarizes "change in retained earnings"

From "Statement of retained earning" it goes to "Balane Sheet"

3)

The heading is "Balance sheet" which states Asste =liability+equity

it is at a "given point of time"

It summarizes "asset,liability and equity"

it moves to "Statement of Cash flow"

4)

The heading is "Statement of Cash flow" which shows source and use of cash

it is at a "period of time"

It summarizes "source and use of cash"

Thanks

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