What is balance sheet , income statement, difference between them,

Question

Accepted Answer

Balance sheet and income statement are financial statements used to track a company's financial performance.

Balance sheet shows a company's assets, liabilities, and equity at a specific point in time.
Income statement shows a company's revenue, expenses, and net income over a period of time.
Balance sheet is a snapshot while income statement is a movie.
Balance sheet helps to determine a company's liquidity and solvency while income statement helps to determine its profitability.
Example: A balance sheet may show a company has $100,000 in assets and $50,000 in liabilities, while an income statement may show the company had $200,000 in revenue and $150,000 in expenses, resulting in a net income of $50,000.

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