Response to Comments on DQ1 C and DQ2 KSmith,Wk3 Essay

Response to Comments on DQ1 C and DQ2 KSmith,Wk3 - Essay ExampleYou mentioned that the annual report is the near important report prepared by corporations for the shareholders and other stakeholders. I agree that the annual report is the most informative corporate statement since it provides valuable schooling about the business, its finances, and the strategic goals of the enterprise. Learning the basics about financial statements can help investors make better investing decisions. DQ2 The use of a classification system in the balance woodworking plane is very useful because it creates consistency between statements. Investors can utilize the information contained in the classified balance sheet to effect quantitative financial analysis such as ratio analysis, variance analysis, or sensitivity analysis. The list of assets included in the classified balance sheet is ordered from top to bottom with the top accounts representing the most liquid ones. The most liquid financial asse t is cash (Investopedia, 2011). When I answered this question originally I also could not think of any additional classification that could add value to the classified balance sheet. The balance sheet internal structure follows the system of logic of the basic accounting equation which states that assets equals liabilities plus stockholders equity. The format used in the classified balance sheet is very easy to image which makes it easier for teachers to teach accounting students.