Accounting Balance Sheet Essay

a. A Balance Sheet statement presents the assets, liabilities, and equity of the entity as of the reporting date. The report format is structured so that the total of all assets equals the total of all liabilities and equity. A balance sheet lays out the ending balances in a company 's asset, liability, and equity accounts as of the date stated on the report. The most common use of the balance sheet is as the basis for ratio analysis, to determine the liquidity of a business. Liquidity is essentially the ability to pay one 's debts in a timely manner. An Income statement presents the financial results of a business for a stated period of time. The income statement is an essential part of the financial statements that an organization releases. It itemizes …show more content…
The items that subtract from net assets include dividends paid and shares redeemed. The primary function of public accountants and public accounting firms is to conduct external audits of balance sheets, income statements, quarterly reports, and earnings reports. Public accountants must evaluate their clients ' financial statements based on GAAS (Generally Accepted Auditing Standards) and ensure that the statements have been prepared in accordance with GAAP (Generally Accepted Accounting Principles).The use of the word “public” in the term public accounting highlights the importance of the services these professionals provide to the general populace when conducting external audits. Investors and consumers depend on the accuracy of accounting information when evaluating the financial status of companies, and when making decisions about what to do with their financial resources. The integrity of the financial system as a whole depends largely upon the ability of public accountants to perform external audits competently. The external auditing services provided by public accounting firms are crucial to providing the investment community with an accurate picture of the financial viability of publicly traded