Learn About Income Statement and Balance Sheet Completely

3. WHAT IS INCOME STATEMENT?
 Income Statement- It presents the financial record
of a XYZ company’s revenue & expenses, and
profit over a specific period of time.
 It also provide firms financial performance in terms
of revenue, expense and profit over a given period
of time.
 It is also focus on revenue and cost associated with
revenues.

4.  The Operating section of an Income Statement
includes revenue and expense.
 The Non-Operating section includes revenue and
gains from Non-Primary business activates also
expenses that are either unusual or infrequent
finance cost like interest expenses and Income Tax.

7. WHY INCOME STATEMENT ESSENTIAL?
 Income Statement is one of the main component of
financial statements used by accountants and
business owners.
 It shows the profitability of a company during the
time interval specified in its heading,
 It also helps to identify Risk and Opportunities to
predict future performance of OWNER, INVESTOR,
CREDITORS, COMPETITORS

8. FUNCTIONALITY
 Evaluate past performance
 Predicting future performance
 Help assess the risk or uncertainty of getting future
cash flows.

9. LIMITATIONS
 Companies neglect items that cannot be measured
reliably.
 Income is affected by the accounting methods.
 Income measurement involves judgments.

10. BALANCE SHEET
 Balance sheet is a financial statement that
summarized a company asset, liabilities and
shareholders equity at a specific point in time.
 Accounting balance sheet is one of the major
financial statement used by accountants and
business owners.
 It is also referred to as the statement of financial
position.

11. BALANCE SHEET
 Assets:- Its something which is tangible or intangible
which is owned or leased by a business.
 Liability:- Its an obligation which a company owns to
another business entity.
 Owner Equity:- All claims of sole owner and partnership
or stockholders against the assets of a firm, equal to the
excess of assets over liabilities.
 Basic accounting equation:- Relationship that states that
assets are equal to liabilities + Owner Equity
 Asset = Liabilities + Owner
Equity

14. WHY BALANCE SHEET
 A Balance Sheet provide a way to look inside your
sole owner, partnership, joint stock business and
outline what it is really worth. Balance sheet
different from a measure of profit and loss.
 It contain list of Assets and Liabilities.
Thank You!