Difference Between Income Statement And Balance Sheet

Here we discuss about the Difference Between Income Statement and Balance Sheet.

Ø Income Statement shows the financial performance of the company businesses while Balance Sheet shows financial Position of the company businesses.

Ø It is the first step in Final Accounts while Statement of Financial Position is the second step.

 

Ø It is prepared for a particular period of time. For Example it is prepared for month, quarterly, half yearly and annually. While the Balance Sheet is prepared at a particular period of time. For Example, if it is prepared as on 31^st October 2015, then it shows the financial position of the company businesses as on 31^st October 2015. On 1^st November 2015, the financial position of company businesses will be different after recording Business Transactions.

Ø All accounts shown in the former have no balances and are written off after passing Closing Entries, while in the later, Kinds of Accounts i.e., Assets, Liabilities, Capital have balances and transferred to Statement of Financial Position.

So it is all about the Difference Between Income Statement and Balance Sheet. Hopefully, now you will learn about the Difference Between these two important Financial Statements.