What is the relationship between financial statements and time?

Answer 1

thank you for your question, let's first review the purpose of each statement and then try to tie them together through this review: 1) Balance Sheet Statement: takes a picture of assets, liabilities, and equity at a certain date in order to allow readers have an accurate understanding about the financial position of the company and where participants or owners stand. 2) Income Statement: Shows the performance of that company along the accounting period in terms of revenues and expenses. The outcome of this performance is shaped in either net income or net loss. This net income or loss is actually the extra money the company gained or lost through its operations which cannot be seen in the balance sheet unless income statement is prepared. So you will find Net income or loss from income statment exists in the equity section of the balance sheet. 3) Cash Flow Statement: The main purpose of the cash flow statement is to show the entrance and exit of cash, and whether the cash gained is a result of the company's operations activities, invisting or financing activities. A cash flow statement of a healthy company would show that the density of cash entrance comes from its operating activities. The net entrance or exist of cash should be equal to the difference between beginning and ending balance of cash that appears in the balance sheet statement. The interrelationships between the financial statement might have other dimensions. The dimention I mentioned is just what I found from my perspective.

Answer 2

What is the relationship between financial statements and time?

For publicly traded companies and many other private entities audited financial statements are prepared at the end of an accounting period (usually a year). Unaudited financial statements are often prepared on an interim basis (usually quarterly). For a comprehensive look at the relationship between the four basic financial statements, see here ... http://vitalbusinessinfo.blogspot.com/2009/10/relationship-between-financial.html