Explain the types of financial statements, Accounting Basics

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Explain the types of Financial Statements

Income Statement. This is a summary of a business's expenses and revenue for a specific period of time. It ONLY shows expenses and revenue.

Net Income is realized when revenue exceeds expenses.

Net loss is realized when expenses exceed revenue.

Statement of Owner's Equity. This is a summary of the changes which have occurred in owner's equity during a specific period of time.

This statement will demonstrates either a decrease or increase in capital account.

Balance Sheet. This statement is a listing of firm's liabilities, assets and owner's equity at a particular point in time. Total Assets should equal the addition of Liabilities and Owner's Equity.

 


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