Publicly traded companies are required to publish

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Publicly traded companies are required to publish quarterly financial statements in the US. Most other countries require semi-annual reports. Virtually all companies will prepare annual financial statements. Using trial balances from any two points in time, a business can create an income statement that tell the financial story of the activities for that period. But remember, the changes in owner's equity as a result of operations are recorded in revenue and expense accounts rather than directly to owner's equity. At the end of each year, balances in the revenue and expense accounts, which are normal accounts and make up the income statement, are transferred to the owner's equity account which is a real account and part of the balance sheet.
For Green Mountain Coffee, the fiscal year ends on September 28, 2013. This is what the balance sheet would look like at the end of the fiscal year after the adjustment to owner's equity has been made. Thus, the income statement is connected to the balance sheet through the retained earnings account. Changes in revenue and expense accounts, which impact retained earnings during the accounting period, are stored and shown in detail on the income statement. The difference between the revenues and expenses represents the profit or loss for the period and is an increase or decrease to retained earnings. In a sense, normal accounts give a more detailed look at the owner's equity account as a whole. When we prepare the financial statements at the end of a fiscal year, the net effect of the normal account is transferred
to retained earnings in what is called the closing process. This process updates the retained earnings balance to the current point in time and resets the balances in the normal accounts back to 0. Financial Position vs. Financial Performance We say that the balance sheet shows the company’s financial position, because it shows the balance of all real accounts at a single point in time, as of a specific date, such as December 31, 2014. This is a snapshot of a point in time, similar to a photograph. The balance sheet is sometimes referred to as the statement of financial position. Conversely, we say that the income statement shows the company’s financial performance, because it shows the accumulation of all nominal accounts over a period of time, such as for the year ended December 31, 2014. This is a view into a period of time—think of a video, as opposed to a photograph. The income statement is sometimes referred to as the statement of profit or loss, or P&L. This is Green Mountain Coffee Roaster’s trial balance at the end of the period, after all the transactions for the year have been posted. The trial balance contains all the information we need to create an income statement. While formatting details can vary slightly from business to business, in this course we’ll focus on one of the most common formats.
Before we move on, let's recap the very important concepts of real and nominal accounts as well as accounting periods and the closing process.

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