3 ms·
Isn’t the balance sheet changes between two points in time the cash flow statement? The P&L is based on transactions on Income accounts. The balance sheet is a
by TeeWEE 3y ago
Isn’t the balance sheet changes between two points in time the cash flow statement?
The P&L is based on transactions on Income accounts. The balance sheet is a point in time view of BalanceSheet accounts.
For example: CASH is balance sheet. However REVENUE is an income account type.
The income statement is the changes between to points in time of all balances of Income accounts.
- rahimnathwani 3y agoThe balance sheet's components each capture distinct aspects of a company's finances. While you've mentioned 'income accounts', these actually fall under the Equity section. A balance sheet has three primary segments, corresponding to the accounting equation: - Assets - Liabilities - Equity Specifically, you seem to be focusing on: --Assets: Cash and cash equivalents-- This indicates a company's liquid position. To understand cash flow changes over a given period, compare the differences in 'cash and cash equivalents'. -- Equity: Retained earnings–- This reflects accumulated income. To gauge profit changes over a time frame, observe the variations in Retained Earnings. (This is accurate provided no dividends were distributed during that period.)