A balance sheet, income statement, statement of owner's equity and the statement of cash flows are each examples of financial statements. These four types of financial statements are used by businesses for reporting as required by the authoritative set of standards known as the U.S. Generally Accepted Accounting Principles and have been officially adopted by the Securities and Exchange Commission, according to QuickMBA.Continue Reading
In the assets section, the balance sheet shows the long-term, short-term and intangible assets currently held by a company. The equity section lists the retained earnings and stocks, and the liabilities section shows the long and short term payables owed. The income statement details the revenues earned by a company during a specific period and deducts expenses, such as cost of sales, administrative costs and tax, from that amount, calculating the total net income.
The statement of owner's equity, which is also called the statement of retained earnings or equity statement, indicates the capital a company has. It lists the retained earnings deposits, and any withdrawals, which are often dividend payments to the shareholders. The statement of cash flows tracks cash flow activity in three sections, operating, investing and financing, and totals the resulting cash balance, according to Accounting Explained.Learn more about Accounting