How The Primary Financial Statements (income Statement, Balance Sheet, And Cash Flow) Tie Together?


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amber Jhon Profile
amber Jhon answered
Basically after the derivation of net income from income statement, it is added in the statement of Changes in Equity. The whole amount that is achieved from addition of net income in the statement of changes in equity is added in the ending retained earnings of balance sheet. The total retained earnings of balance sheet includes the previous plus new earnings that's why we did this. In the cash flow statement, operating income from activities is used in the income statement. In this way financial statements are tied together.

thanked the writer.
Anonymous commented
Thanks Amber, you made it seem more understandable than the book!!!!
amber Jhon
amber Jhon commented
You welcome! And Thanks for your lovely comments... Keep enjoy blurting!

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