4_Types_of_Financial_Statements

Financial Statements There are four kinds of Financial Statements: 1. Income statement 2. Statement of owner’s equity 3. Balance sheet 4. Statement of cash flows An income statement is a financial report that indicates sources and amounts of revenues, amounts of expense accounts, and profit or loss. The form is often referred to as a profit and loss statement. An income statement presents the results of a company's operations for a given reporting period. Along with the balance sheet, the statement of cash flows, and the statement of changes in owners' equity, the income statement is one of the primary means of financial reporting. A Statement of owner's equity is one of the basic financial statements and it explains the changes in company's earnings over the reporting period. It breaks down changes affecting the account, such as profits or losses from operations, dividends paid, and any other items charged or credited to retained earnings. The Statement of owner’s equity uses information from the income statement and provides information to the balance sheet. A Balance sheet is a financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. The balance sheet table form shows Assets, Liabilities and Equity and uses the formula: Assets = Liabilities + Shareholders' Equity. The Statement of cash flows is a statement that provides information about an entity's cash receipts and cash disbursements for a period as they apply to operating, investing, and financing activities over a period of time. Examples of cash inflows from operating activities are cash sales, customer collections on account, interest income, and dividend income.