COMPARE & CONTRAST DIAGRAM

Directions: Please list the two terms you are comparing in the table below. Next, prepare a list of examples explaining how these two terms are similar. Finally, prepare a list of examples explaining how these two terms are different. However, first identify how you plan to contrast the terms in the middle column. For example, suggestions might be: (purpose, types, etc). Course: Bus Accounting Unit: Financial Statements Topic: Analyzing Statements

WHAT ARE MY TWO TERMS?

Income Statement Balance Sheet

HOW ARE THEY SIMILAR?

Theyre both tangible Both need an equation Both has set rules

HOW ARE THEY DIFFERENT?

INCOME STATEMENT To show how much profit the business produces starts with 4-Expenses 5-Revenue Expenses +revenue = Net Income Revenue is listed from most primary to least primary describes the current year performance provide the current year net profit information With Regard To PURPOSE Chart of accounts The different things found How theyre organized Time Period BALANCE SHEET To see how much net income this business made Starts with 1-Assets -Liabilities 3Owners Equity The accounting equation Assets =Liabilities + Owners equity Assets listed from most liquid to least liquid describes the overall position of company right from the starting year of business to current year. Shows the overall assets and liabilities of company applied in the business.

Has different overall types of statements

Known as a Profit and Loss Statement, states the entity's income and expenses for a specific period of time. The last entry on statement, or "bottom line," is the entity's net profit or loss for that period.

What they show and for how long.

a "snapshot" of the entity's financial condition at a specific point in time The first section is Assets, or things the entity owns, which includes cash and investment accounts, fixed assets, and receivables, among others.