Primary Financial Statements

Topic

Primary Financial Statements

Instructions

Watch the “Author’s Corner: Financial Statements” video.

Consider the following as you watch:

• What are the three primary financial statements covered in the video and what type of information do they provide to users?

Answer preview

In the video involving the host as the interrogator and Paul Kimmel as the respondent, the three covered primary financial statements include the income statement, the cash flow statement, and the balance sheet. According to Kimmel, income statement contains information regarding the revenues representing the company earnings attained during a certain period and the company expenses representing costs incurred during a certain period. Moreover, on the income statement, the subtracting expenses from difference of revenue make the net income, which is highly reliable in measuring profitability of an entity.

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