FR U1DB2 Response 1 and 2

Discussion Responses
Name
Course
Institutional Affiliation
Discussion Responses
FR_U1DB2 Response 1 VB
Thank you for your post which is quite enlightening. According to Gibson (2013), the users of the financial statement are the internal as well external stakeholders such as managers, owners, security analyst, lending institutions and bondholders among others. However, they all use the financial statements as a tool to facilitate better decision making. Thus, despite the vast difference in the type of users, financial information is used for a common goal. Besides, the emphasis that the balance sheet presents the financial standing of a company at a given static time while an income statement delves over a definite period such as a month or a year is also well set out. I also concur with the assertion that estimates can be useful measures of the financial position particularly if well documented and notes included in supporting the contention. According to Gibson (2013) accountants in assessing and estimating situations should use the concept of conservatism and therefore select the least favorable effects on income. Besides, the estimation should follow a consistent principle and be objective to reduce exaggeration.
Reference
Gibson, C. H. (2013). Financial Statement Analysis: Using Financial Accounting Information (13ed). Mason, Ohio: South-Western, Cengage Learning.
Response to FR_U1DB2 Response 2 TD
Thank you for your post. According to Gibson (2013), the income statement illustrates the differences in incomes over a period while the cash flow statement demonstrates the changes in the flow over the period.

Thus, I agree with the assertion that the income statement also referred as the statement of comprehensive income and the cash flow statement are the financial statements that would explain the difference between two balance sheet dates. Further, the explanation is very bold, detailed, and therefore insightful in outlining the interrelation of the income statement, the cash flow statement and the balances sheet. On estimates, Gibson (2013), explains accounting information should be relevant, reliable and verifiable, thus if this is adhered to, the estimates are often likely to match the actual values closely. Besides, there is a preference for objectivity in the preparation of financial statements which ensures most of the verifiable data is available consequently limiting the effects of estimates (Gibson 2013).
Reference
Gibson, C. H. (2013). Financial Statement Analysis: Using Financial Accounting Information (13ed). Mason, Ohio: South-Western, Cengage Learning.