FMA 3 of 5: Contrast information on balance sheet and income statement

Contrast information on balance sheet and income statement
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Contrast information on balance sheet and income statement
The information if the income statement is classified based on the accounting standards used by businesses. However, the information is not different because the function and need of income statement remains one: to determine the profit of the business. Balance sheet on the other hand is used to determine the financial position of the business. The information available on it is universal irrespective of the accounting standards used (Lasher, 2011). This paper seeks to contrast the information on balance sheet and income statement.
The information containing in income statement helps in making financial decisions and they include: sales, gross margin, costs and expenses, interest expenses, earnings prior to taxes, interest prior to taxes, taxes, and profit or net income or earnings after tax. On the other hand, balance sheet contains information that is used to determine the ...