accounting

The four financial statements common to most businesses are the Balance Sheet, Income Statement, Statement of Retained Earnings, and Cash Flow Statement. All four of these financial statements provide different, yet complementary, perspectives on the success of a business. The Balance Sheet is a snapshot of all of a business’s assets and liabilities at a single point in time. This includes all tangible and intangible assets, such as property and equipment, as well as all liabilities, such as loans and accounts payable, and equity. This financial statement helps provide information about the company’s liquid assets and its overall financial health at a given point in time. The Income Statement, also known as the Profit and Loss Statement, shows a business’s income, expenses, and profits or losses over a set period of time. This statement typically covers a one-year period and shows the actual or projected revenue for a business. It also provides information about the cost of goods sold, operating expenses, and other transactions that can affect the business’s profit or loss. The Statement of Retained Earnings shows the changes in the amount of retained earnings over a period of time. Retained earnings are typically the amount of profits that a business reinvests into itself, rather than paying out as dividends to shareholders. This statement typically includes information about the total retained earnings of a business, as well as any extraordinary items such as stock dividends, stock repurchases, and other