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Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

Explain the following statement: Although the balance sheet can be thought of as a snapshot of a firm’s financial position at a point in time, the income statement reports on operations over a period of time.

Summary Introduction

To explain: The sentence that balance sheet reflects firm’s financial position at a point in time but the income statement reports the operations over a period of time.

Introduction:

Balance sheet: Balance sheet is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. It is prepared at the end of accounting period and informs about company’s financial position on that day.

Income Statement: A part of financial statements that lists the income and expenses of business for an accounting year is called income statement. It is prepared at the end of accounting period to know the profitability of the business.

Explanation
  • A company uses income statement to reports the income and expenses of business for an accounting period to find the profitability for that period...

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