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


Learn accounting with the free app

Accounting Flashcards

Accounting Flashcards includes a translate button for English, Chinese, and Spanish.

Learn financial accounting using beautifully illustrated flashcards, coordinated lessons, and rich audio. Whether you are an aspiring CPA or IFRS expert, use this accountancy app to reach your goals. Even an aspiring chartered accountant or those reaching for the CPA Australia can benefit. Topics of accounting standards, equation, terms, ratios, and more are covered.


Get the PDF book here



« Back to Glossary Index