A balance sheet is a quick picture of the economic situation of a company on a certain period of time. The activities of a company is divided into two distinct groups specified by an auditor. They are profitable activity, including expenses and sales. This can also be called an activity. There are also financing and investment activities, which includes money of debt and equity securities capital sources securing, returning capital to these resources making distributions of profits for shareholders, investments in fixed assets and ultimately disposing of assets.
Profit-making activities are recognised in the income statement. financing and investment activities are presented in the statement of cash flows. In other words, establishes two different financial statements for the two different types of transactions. Statement of cash flows reports including cash and cash equivalents increase or decrease of the profit for the year as opposed to the amount of the profits recognised in the income statement.
Balance is different from the statements of revenue and cash flow generated by the report, which it says, income from cash and outgoing. The balance sheet shows balances or amount, or by a company's assets, liabilities and shareholders ' equity at a time. The word balance has several meanings at different times. Because it is used in the balance of the term, refers to the balance between the two opposing sides of a company, the total assets and liabilities. Balance of an account, such as assets, liabilities, income and expenditure accounts, however, refers to the amount on the account after the recording is increasing and in your account, just as the balance of your checking account reduces. Accountants can prepare a balance sheet every time that a head request. But they generally are prepared at the end of each month, quarter and year. He always readiness at the end of trading on the last day of the period of profits.
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