Gabriel R.

1ones
ACC557
Application of Financial Statement
August 22, 2011

Select either the balance sheet or income statement and explain how the use of it may be
applied to your everyday life.
The income statement may be the most useIul budget tool Ior everyday liIe. In today`s
economy, detailed budgeting has become a necessary task Ior many households. 'The income
statement reports the success or proIitability oI the company`s operations over a speciIic period
oI time. (Kieso, 21) Like a company, a household`s success is dependent upon maintaining
positive net income to continue to operate or continue the current liIestyle. The income
statement Ior a household will show the income, or wages oI the household along with the
expenses; yielding the net income. Understanding the expenses and learning to control the
expenses can be achieved by periodic review and trending oI the income statement Ior the
household. Sometimes merely seeing the inIormation in a consolidated Iormat can assist a
Iamily in reducing expenses and maintaining proIitability.


Using the same concept selected above, discuss how a business manager may benefit from
an understanding of this statement.
Like a household it is important Ior a business manager to understand iI the company is
proIitable



Discuss how your understanding oI the balance sheet and income statement may be applied to
your current or Iuture position.