Explain why the balance sheet does not portray the market value of the entity.

What do the terms "paid-in-capital" and "retained earnings" mean? A summary of the companys significant accounting policies is a required disclosure. Why is this disclosure important to external financial statement users? Represents the amount of capital received from stockholders. Paid-in Capitals main source is Common Stock.

Every annual report of a public company includes an extensive discussion and analysis provided by the companys management. Specifically, which aspects of the company must this discussion address? Isnt managements perspective too biased to be of use to investors and creditors?