Explain the 3 financial statements and how they are linked to each other

Question

Accepted Answer

The three financial statements are the income statement, balance sheet, and cash flow statement, each providing different insights into a company's financial performance.

Income statement shows a company's revenues and expenses over a period of time, resulting in net income or loss.
Balance sheet provides a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time.
Cash flow statement details the cash inflows and outflows from operating, investing, and financing activities, reconciling with changes in cash and cash equivalents on the balance sheet.
The three statements are interconnected as net income from the income statement flows into the balance sheet's retained earnings, while changes in cash on the cash flow statement impact the cash and cash equivalents on the balance sheet.

Accepted Answer

Three financial statements are income statement, balance sheet , and cash flow statement

Explain the 3 financial statements and how they are linked to each other

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