Answer preview

One of the financial statements includes a balance sheet that explains the financial situation of an organization at a specified time. The right side of the balance sheet represents the business assets, while the right comprises of liabilities. However, the assets will always equal the liabilities and owner’s equity. Assets include cash at hand and accounts receivable when someone buys goods on credit. Liabilities comprises of the individuals or entities that the business owes money to while the owner’s equity is a business part belonging to the owner. If the owner reinvests earning into the company they are known as retained earnings and bad debt can be deducted from earnings. A long term loan that involves interest is referred to as a note payable (Banas, Part 1, 1:03, 2010). On the other hand, an income statement is updated weekly, which entails the sales made and the expenses incurred; once deducted, they result in the net profit. The information presented in this video will be useful in managing a human service program since it helps to explain the financial situation of an agency based on the assets and liabilities and the realized net profit.(912 words)