Asked by Kaylee Craig on Apr 27, 2024
Verified
The income statement reflects flows of money over a period of time. The balance sheet represents stocks of money at a point in time.
Income Statement
A financial document that summarizes a company's revenues, expenses, and profits over a specific period, showing its financial performance.
Balance Sheet
A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.
Flows of Money
The movement of money between entities in an economy, including spending, investing, and financing activities.
- Understand the core concepts of the double entry system and the differences between the balance sheet and income statement.
Verified Answer
MR
Madeline RichardsMay 01, 2024
Final Answer :
True
Explanation :
The income statement shows financial performance over a specific period, such as a month, quarter, or year, while the balance sheet shows a company's financial position at a specific point in time, typically at the end of a reporting period. The income statement reflects inflows and outflows of money during that period, while the balance sheet shows the company's assets, liabilities, and equity at a specific moment.
Learning Objectives
- Understand the core concepts of the double entry system and the differences between the balance sheet and income statement.