Financial Accounting:

1001 Words3 Pages

Introduction
Financial accounting that is about reporting and summarizing the transactions of business and provide an accurate financial reports or financial statements such comprehensive income and finacial position (Averkamp, 2014). However, if investing in a business and want to acquire more profit, the financial statemnet of company is must be analysed before taking a decision. This essay will explains that financial statements between two companies about four years comprehensive income statements and four years statements of financial position. Then, it will be give a answer which one is best to invest.

Definition
Comprehensive income is the change in company's equity (net assets) in a period of time from transactions with owners. All of statements such as expenses and income recognized. Comprehensive income has a good example that is losses or profits on foreign currency transactions. The purpose of the statement of comprehensive income shows that the results and financial performance of specific company operated or other factors during a period (Ready Ratios (2014). Furthermore, according to the financial analysis of comprehensive income is defined as to evaluate operating events and the sum total of all financial situation which have changed the value of an owner's interest in the business.

The statement of financial position is as same as with the balance sheet. The statements are generally used by large and samll companies. The financial positon reflects that the result of financial position and the financial status of enterprise at a specific date. Also, it will reports the difference in their totals and financial entity's assets, liabilities (Averkamp, 2010). For instance, thare are four statements are income statem...

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... between redemption and share capital issues, net profit or loss, that need recognized in equity. Secondly, statement of cash flow mainly linked to financial position of the cash flow, due to it analyze the part of the balance sheet which is changes in cash and cash equivalents balance, the effect of equity reserves and debt.

Conclusion
To sum up, this essay has illustrated the similar and difference of the statement of comprehensive income and statements of financial position, and the relationship both of them. It have been arguement which caculation method is best when invest in a business. Personslly speaking, the statement of financial position is the most effective method to explain the financial condition of a company. Nevertheless, another one comprehensive income statement also as sane is indispensable, because financial position besed on income statement.

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