In the field of bookkeeping & reporting, there are mainly four types of financial and accounting reports that are used as financial indicators of the company. These are capital statement, income statement, balance sheet, and cash flow statement. Let’s briefly look into each one of them in this article.
Capital Statement: A capital statement is an indicator of the capital accounts of the owner company or the business. It gives you a clue about the owner’s investment and tells if it increased or decreased over a period of time. It is interesting to note that it is the income statements that are produced first followed by capital statements.
Income Statement: An income statement indicates the income that has been earned during an annual reporting period. It indicates the loss or profit by calculating the difference between the revenue and the expenditure.
Balance Sheet: A balance presents a company’s financial position at the end of a particular date. A balance sheet gives the financial position “at a moment” or “at a point in time.” It is with the help of a balance sheet that a banking institution can gauge what a company owns as well as what are its liabilities. Sydney Accounting services has a team of professionals that can you help you create an up-to-date balance sheet for your business.
Cash Flow Statement: Cash flow statements are mainly used for the purpose of creating a budget for the company by taking into consideration every cash inflow or cash outflow over a period of time.