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Basic Financial Statements

Updated on May 25, 2009

Basic Financial Statements

Income Statement ~ presents the revenues, expenses and net income or loss an entity for a specific period. It shows the results of operation or economic performance of the entity.

Balance Sheet - is a statement that shows the financial position or condition of an entity by listing the assets, liabilities and owner's equity as of a specific date. The information needed for the balance sheet items are the net balances at the end of theperiod.

Statement of Owner's Equity - it summarizes the changes that occurred in the owner's capital account. Increases in owner's equity arise from additional investments by the owner and net income during the period. Decreases result from withdrawals by the owner and from net loss lor the period.

Statement of Cash flows - provides information about cash receipts and cash payments of an entity during the period. It is a formal statement that classifies cash inflows and outflows into operating, investing, and financing activities.


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