Financial statement relationships: Financial statements are dependent on each other for financial reporting

  • The income statement calculates net income or loss
  • Net income is added or a net loss is deducted from retained earnings on the balance sheet at end of accounting period
  • The statement of cash flows uses net income and changes in balance sheet accounts to present the cash ins and outs
  • The statement of shareholders’ equity reports the balance sheet equity detail

L_10F_Financial_statement_relationships

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