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Explain how the income statement and the balance sheet are related. Provide an example that...

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Accounting

  1. Explain how the income statement and the balance sheet are related. Provide an example that demonstrates your understanding of the importance of utilizing both statements to describe the performance of an organization.

2. The cash flow statement provides additional information beyond the income statement and balance sheet. Explain why the cash flow statement provides useful information beyond the other statements.

3.

Arrange the following items in the appropriate income statement and balance sheet formats. Determine in which of these two documents each of these items belongs, then include all appropriate items in outlines of an income statement and balance sheet. Prepare your response as a Word document and upload it to Drop Box 2.1.
  • Sales
  • Cash
  • Depreciation expense
  • Inventory
  • Accounts payable
  • Cost of goods sold
  • Long-term debt
  • Accrued expenses
  • Accounts receivable
  • Income tax payable
  • Income tax expense
  • Retained earnings
  • Accumulated depreciation
  • Prepaid expenses
  • Interest expense
  • Sales tax payable
  • Operating expenses
  • Gross profit
  • Contributed capital

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