Assignment Instructions Write a XXXXXXXXXXword paperthat addresses the following topic: Explain the impact of accounting transactions in financial statements. Describe the elements and purpose of each...

FINANCIAL ANALYSIS
FINANCIAL ANALYSIS        4
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SUBJECT: FINANCIAL ANALYSIS
Effect of transactions in financial statements of the entity:
Each and every transaction in accounting is very significant in attaining the aim of having the correct and reliable records. Thus in order to have reliable record it is necessary to have each and every transaction must be recognized properly. A transaction consists of sales, loans and other transactions related to goods and services. In other words the accurately formed financial statement enables entity to determine its overall financial position and to analyze the information more efficiently to make business decisions (Bragg S. 2019). Financial statement is the important tool which the investor utilizes in making the decision regarding the investment made by them in the entity. Moreover each and every accounting transactions needs to follow the equation of accounting that describes the transactions should leads to assets which should be equal to the liabilities plus shareholder equity. Thus to develop the accurate financial statement of the entity it is required to recognize each and every entry in the financial statements of the entity (Francis, K.A.2018).
Components and Usefulness of each financial statements:
There are various components in the financial statement of the entity such as assets, liabilities, equity, and comprehensive income, revenues, expenses, investment by owners and distribution to owners are the basic components which forms an important part of the financial statement of the entity. Assets can be termed as the items which are owned by the entity which are economically beneficial. On the other...