Define These Terms: Financial Statement,balance Sheet,income Statement,and Audit

question 75

Essay

Define these terms: financial statement,balance sheet,income statement,and audit.Explain the use of each.
Financial statement: a summary of some aspect of an organization's financial status.The information contained in financial statements is essential in helping managers maintain financial control over the organization.
Balance sheet: a summary of an organization's overall financial worth (assets and liabilities)at a specific point in time.This document helps managers understand how much their business is worth.
Income statement: a summary of an organization's financial results (revenues and expenses)over a specified period of time.This document helps managers determine the profit or loss over the specific period of time.

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Definitions:

Unearned Revenues

Income received by a company for goods or services yet to be delivered or performed, considered a liability until earned.

Revenues

The total income generated by a company from its normal business operations, before any expenses are subtracted.

Debits

Entries made on the left-hand side of an account, representing an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Increase Side

Typically refers to the side of an account (debit or credit) used to record increases in that account, varying by the type of account.