Sample Essay
Words 1,200
This essay discusses the relationship between an income statement and a balance sheet. Income Statement is also known as a Statement of Operations or a Statement of Receipts and Disbursements, gives a picture of how much cash was earned by the organization and how much money was spent over a specified period of time.
Income Statement is also known as a Statement of Operations or a Statement of Receipts and Disbursements, gives a picture of how much cash was earned by the organization and how much money was spent over a specified period of time.
A balance sheet is a review of the financial position of an organization at a specific point in time. The. The Balance Sheet presents a picture of a business’ net worth at a specific point in time. It sums up all the economic data about your business, breaking that data into 3 categories; assets, liabilities, and equity.
The income statement is the major link between two balance sheets: income statements as fills in the gaps between balance sheets. The balance sheets show the financial position of the company at discrete points in time, and the income statements explain the changes that have taken place between those points. The net income (or loss) from the Income Statement is brought forward to the Balance Sheet. To obtain the year-end equity position, net income is added or net loss is subtracted from the equity position at the beginning of the year.
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