Income Statement
Balance Sheet Comparison

The income statement balance sheet are two separate financial statements, probably the two most requested statements that you will be asked to provide as a bookkeeper, in order to show the financial state of the business.

One big difference between the balance sheet and income statement is that the income statement gives the total of the income and expense accounts for a period of time whereas the balance sheet gives a balance of the accounts as of a given date.

For example a profit and loss statement for the 4th quarter 2009 gives the total in all income and expense accounts for October 1, 2009 - December 31, 2009. Whereas the balance sheet would tell you the balance in your asset, liability and equity accounts as of December 31, 2009.

In addition, the income statement shows more about the operational activities of the company, how much money it has made from sales and services, how much it cost to produce those sales and services, how much it cost to maintain the business while it produced those sales and services, and what the remaining net profit is.

On the other hand, the balance sheet gives the total assets, liabilities and equity of the company, basically what the company is worth in cash and tangible assets as of a given date.

The Profit and Loss or Income statement would be prepared before the balance sheet because some information, such as net income, is carried over from the income statement to the balance sheet.

Related Topics

For more on the income statement, click here.

For more on the balance sheet, click here.

To find out more about the accounts mentioned, click on the following: income, expense, asset, liability, equity.

Here is some general information about financial statements , what information they provide and who might find them useful.

Return from Income Statement Balance Sheet to Stress-Free-Bookkeeping HomePage