Question

Identify the differences between a balance sheet and income statement  
   Compare and Contrast
- Items on each: define
- Sections and subsections of each statement
- State the Accounting Equation
- Income Statement Equation (Net Profit or Loss formula)

Answer 1

Balance sheet vs. Income statement

Particulars	Balance Sheet	Income Statement
Definition	It is a financial statement prepared at the end of year which shows the firm's financial position up to the end year. It contains items such as Equity capital, Liabilities and Assets	It is also a financial statement prepared at the end year which shows firm's financial performance during the year. It contains items such revenue during the year and expenses during the year.
Sections & subsections	Equity Share Capital Reserve & Surplus Long term Debt Current liabilities Non-current Assets current Assets	Revenue Expenses Operating expenses non-operating expenses interest expenses tax expenses dividend
Equations	Accounting Equation Equity = Total Assets - Liabilities	Net Income/Loss = Revenue - operating and non operating expenses - interest - tax