1. Financial statements and reports What happened to assets, earnings, dividends, and cash flows during the financial year? Accounting practice in the United States follows the generally accepted accounting principles (GAP) developed by the Financial Accounting Standards Board (FASB), which is a nongovernmental, professional standards body that monitors accounting practices and evaluates controversies. The Securities and Exchange Commission (SEC) requires all publicly traded companies to periodically report their financial information A publicly held corporation must publish an annual report that contains the balance theet, income statement, statornent or cap now, statement or stockholders' equity, and other financial formation for analysis The following table is descriptions of the major Financial statements and reports that a firm publishes to try the correct statement of report for oach description Statement or Report Annual report Description is required by the SEC and includes the audited document that shows the company's and results for the past year and management discussion about the future outlook and plans Provides quantitative summary of a company, and not worth at a specific point in time Recentes (1) the amount of stochout recorded at the beginning of the reporting period, changes during that period, and (3) the amount of stockholm quity at the end of the reporting po Reconciles (1) the amount of stockholders equity recorded at the beginning of the reporting period, (2) changes during that period, and (3) the amount of stockholders equity at the end of the reporting period Accounts for all revenues and expenses over an accounting period Aggregates all cash inflows, which the company receives from its ongoing activities and Investment sources, and all cash outlows Accountants focus on creating Financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance. Indicate which minandal statement you would refer to when answering the questions in the following table: Income Statement Statement of Stockholders Equity 2 How prontable has the firm been? How much of the mornings are left as balance after the firm pays out dividends to its shareholders? The annual report is very important for investors, because the information contained in the annual report helps investors forecast expected earnings and dividends. shows the prices at which each investor purchased the company's stocks and bonds