Income Statement: This statement shows the company's revenues and expenses over a specific period of time (usually a year). The difference between the revenues and expenses is the net income (or loss) for that period.
Balance Sheet: This statement shows the company's assets, liabilities, and equity at a specific point in time. The difference between the assets and liabilities is the company's equity.
Cash Flow Statement: This statement shows the inflows and outflows of cash over a specific period of time. The difference between the inflows and outflows is the net increase (or decrease) in cash.
Statement of Changes in Equity: This statement shows the changes in the company's equity over a specific period of time. The difference between the beginning and ending equity is the net change in equity.
The main difference between these financial statements is the information they provide and the period of time they cover. The income statement shows the profitability of the company over a period of time, while the balance sheet shows the financial position of the company at a specific point in time. The cash flow statement shows the company's ability to generate cash and manage its cash flows, while the statement of changes in equity shows how the equity of the company has changed over time.
Answers & Comments
The four financial statements are:
Income Statement: This statement shows the company's revenues and expenses over a specific period of time (usually a year). The difference between the revenues and expenses is the net income (or loss) for that period.
Balance Sheet: This statement shows the company's assets, liabilities, and equity at a specific point in time. The difference between the assets and liabilities is the company's equity.
Cash Flow Statement: This statement shows the inflows and outflows of cash over a specific period of time. The difference between the inflows and outflows is the net increase (or decrease) in cash.
Statement of Changes in Equity: This statement shows the changes in the company's equity over a specific period of time. The difference between the beginning and ending equity is the net change in equity.
The main difference between these financial statements is the information they provide and the period of time they cover. The income statement shows the profitability of the company over a period of time, while the balance sheet shows the financial position of the company at a specific point in time. The cash flow statement shows the company's ability to generate cash and manage its cash flows, while the statement of changes in equity shows how the equity of the company has changed over time.