Week 3 E Reflection Part 2

 

Hi,

Please excuse me for posting the E Reflection in two parts.  I had posted the first part of my week 3 reflections before including the second part of the assessment.  I thought I had saved it as a draft!  This is my first experience at blogging although I have known of it for some time. Please find below the second part of my blog the brief description of the balance sheet, income statement and cash flow and their differences.

Balance sheet – Is a summary of the financial position of the entity as at that point in time.  It shows the assets whether current or non-current, the claims against them ( liabilities) showing current and non-current, the owner’s equity is also shown on the liability side of the balance sheet.

Income statement – Shows the income generated by the entity for a period, their source, the costs relating to generating the income, the source of those costs and the difference between the two which is called net profit.

Cash flow statement –  Summaries the cash flow in and out of an entity over a period of time and the different sources.

The balance sheet and the income statement unlike the cash flow statement the  does not give any detail of  the sources of any cash that is identified as an asset. The profit generated by the entity is not visible in either the balance sheet or the cash flow statement but is shown in the income statement .

 

Thank you

Christine

 

 

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