Week 6 DQ’sDiscussion QuestionWeek 6 DQ1Due Week 6 Day 2 (Tuesday)Post your response to the following discussion question by clicking onReply.Peachtree generates several financial statements based on the information entered. Identify and briefly summarize each financial statement. How are these statements used? Why is it important that these statements are accurate?Week 6Discussion Question 1Peachtree generates six financial statements.1.Balance sheet- lists assets, liabilities, and capital of a business for a specific period-of-time.2.Gross Profit by Departments- report so users can evaluate each department’s profitabilityor cost effectiveness.3.Income Statement- summary of revenues and expenses during a specific period. States a net loss or profit for a specific period.4.Statement of Cash Flows- answers three questionsa.Where did cash receipts come from?b.What were cash payments?c.What was the overall change in cash?5.Statement of Retained Earnings- shows the beginning and ending retained earnings, changes during the period, and all equity closed accounts. The lifetime earnings of the companyless the cumulative losses and dividends.6.Statement of Changes in Financial Position- shows change in working capital, assets, andliabilities for a given period of time.How are they utilized?They are utilized as a way of internal controls. They work together to support the information foreach.The net income reported on the income statement is used to update the balance sheet’s capital amount. The retained earnings ending balance is the net income presented on the balance sheetadded tothe beginning retained earnings amount. The statement of cash flows used the information from both the balance sheet and the income statement. The statement of changes uses the information from the income statement and balance sheet. One statement alone cannot report all the information to tell a company’s whole story. Each statement depends on the other to report all the financial information of a company for a specific period of time.Why is it important that these statements are accurate?These statements have to be accurate since each relies on the other. Users rely on this information for internal decisions as well as external decisions. If they are not accurate, it affects how the information on all are reported, and trickles down to how decisions are made.Response 2There are six Financial Statements…1. Balance Sheet- is a list of assets, liabilities, and capital2. Gross Profit by departments- system that management uses to evaluate the profitability or cost effectiveness of a departments activities.3. Income Statement- summary of revenue and expenses, resulting in net income or net loss.4. Statement of cash flows- income statement plus, depreciation, deletion, and any other operating transactions.5. Statement of retained earnings- beginning and ending retained earnings6. Statement of changes in financial position- describes changes in company’s financial position such as: working capital, assets, and liabilities.The business managers and owners to understand what is happening within the business utilize these statements. It is important that these statements are accurate so that when upper management is making business plans and reviewing the company’s financials they are seeing true and accurate statements to make the most effective decisions for the company.Discussion QuestionWeek 6 DQ2Due Week 6 Day 4 (Thursday)Post your response to the following discussion question by clicking onReply.This week, you learned what is contained in several financial statements generated by Peachtree and how these statements interrelate. What information did you find most challenging? Explain why.What information did you find most challenging?Since I am familiar with four out of the six reports generated by Peachtree, the most challenging was the Gross Profit by Departments and Statement of Changes in Financial Information.I assumed you could generate reports by department, but didn’t realize there was an actual title for this report. Learning the masking feature was interesting. Statement of Changes inFinancial Information details the depreciation for the reporting period and year-to-date as well.Overall, the introduction of these two statements brought me a different way to examine information, printing these statements didn’t present a challenge. The only real challenge was rethinking what I previously knew of financial statements and adding these two new statements into my thinking.Response 2As I completed my work this week, I did not find any challenging areas because each statement was explained to where I understood.I did have to review the gross profit by the department statement a couple of times though.This statement was not difficult but rather one I had not learned or used before now.I figured there was a report that you could generate by department, but didn’t realize there was actually one for that purpose.Learning this new statement has shown me a new way to review, examine and generate information.Response 3I found that this chapter was easy to follow as I have had previous experiences with past classes dealing with statements. Being able to understand to the financial statement, balance sheet, gross profit by departments, income statement, statement of cash flow and statement of retained earnings all basic relate to each other. One feeds of the other in order to provide an accurate picture of where thefinancial position of a company lies. Being able to learn to post them has helped me understand a little better on how to demonstrate the quality of each statement and posting them to carry over to the