Accounting essay - contains information about revenues and...

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Interconnectedness of the income statement and balance sheet. The income statement and the balance sheet are connected because at the end of a fiscal period, both financial statements as prepared. the Balance sheet accounts and Income statement accounts have a connection. For example, making sales and having expenses needs a business to maintain a working class balance. Explain what types of information may be drawn from these financial statements. A balance sheet is a financial statement that reports assets, liabilities, and owner’s equity on a specific date. It contains information expressed at a moment in time about the assets owned by a business. In addition, it includes the business’s obligations (liabilities) and owner’s equity. The income statement
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Unformatted text preview: contains information about revenues and expenses and net income as that information has been accumulated for a stated period of time. Net income occurs when revenues exceed expenses. A net loss occurs when expenses exceed revenues. What types of management decision may be derived from both of these statements? Both of these financial statements help show the current standing position of a business. The Income statement shows whether or not the business has a net income or a net loss, which is important to see the financial progress. The balance sheet indicates the financial condition of a business, meaning its financial strength. This is important to know because if a business is not financially strong, changes in the economy might cause a business to fail...
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