Question

Financial Statement Items

Identify the financial statement (or statements) in which each of the following items would appear: income statement (IS), statement of stockholders’ equity (SSC), balance sheet (BS), or statement of cash flow (SCF).

Assets

Revenue

Cashflow from investing activities

Stockholders’ equity

Expenses

Net change in cash

Net Income

Liabilities

Answer 1

Assets	Balance Sheet (BS)
Revenue	Income Statement (IS)
Cash Flows from Investing Activities	Statement of Cash Flows (SCF)
Stockholders' Equity	Statement of Stockholders' Equity (SSC)
Expenses	Income Statement (IS)
Net Change in Cash	Statement of Cash Flows (SCF)
Net Income	Income Statement (IS)
Liabilities	Balance Sheet (BS)

Assets: Assets are the source of funds which the company owns, and it always has debit balance and will be reported in the Balance Sheet. Hence, Assets will appear in the Balance Sheet.

Revenue: Revenue is the amount earned by selling the goods or providing services and it always has credit balance and it is part of income statement in order to determine the net income. Hence, Revenue will appear in Income Statement.

Cash flows from Investing Activities: Cash Flows Statement has three activities – Operating Activities, Investing Activities and Financing Activities. Cash flows from Investing Activities like purchase of assets, receipt of dividends etc. are part of Cash Flows Statement. Hence, Cash flows from Investing Activities will appear in Cash Flows Statement.

Stockholders’ Equity: As the name states, it will appear in the Statement of Stockholders’ Equity as it is a total of Common Stock and Preferred Stock, paid-in capital, treasury stock and retained earnings. Hence, it will appear in the Statement of Stockholders’ Equity.

Expenses: Expense is the amount incurred by purchase of goods or paying rent, salaries etc. and it always has debit balance and it is part of income statement in order to determine the net income. Hence, Expenses will appear in Income Statement.

Net change in Cash: Net change in cash is the result of cash inflows and cash outflows of all three activities of Operating, Investing and Financing in the statement of Cash Flows. Hence, it will appear in the Statement of Cash Flows.

Net Income: Net Income is the result of deducting all the expenses from the revenue in the statement of income. Hence, it will appear in the Income Statement.

Liabilities: Liabilities are the uses of funds which the company owes, and it always has credit balance and will be reported in the Balance Sheet. Hence, Liabilities will appear in the Balance Sheet.