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4. Differentiate between the balance sheet, income statement, and statement of cash flows. In your answer,...

4. Differentiate between the balance sheet, income statement, and statement of cash flows. In your answer, define those terms.

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Expert Solution

A balance sheet(also known as the Statement of Financial Position) lists a company's assets,liablities and shareholder's equity for a period.A balance sheet shows what a company owns in the form of liablities and the amount of money invested by shareholders listed under shareholders' equity.

Income statement(also known as the Statement of Financial Performance) which describes the financial sustainability of the business.It identifies the profit or the excess of revenue over the costs of earning that revenue for a particular period.It also provides information relating to the adequacy of the selling prices and the sufficiency of the profit in relation to the owner's investment.

Cash flow statement shows the amount of cash and cash equivalent entering and leaving a company.It describe the source and application of funds received and dispensed during the reporting period by comparing the opening balances with the closing balances on cash and cassh equivalent accounts.

jeff jeffy answered 2 years ago
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