COMPARE & CONTRAST DIAGRAM

Directions: Please list the two terms you are comparing in the table below. Next, prepare a list of examples explaining how these two terms are similar. Finally, prepare a list of examples explaining how these two terms are different. However, first identify how you plan to contrast the terms in the middle column. For example, suggestions might be: (purpose, types, etc). Course: Bus Accounting Unit: Financial Statements Topic: Analyzing Statements

WHAT ARE MY TWO TERMS?

Income Statement Balance Sheet

HOW ARE THEY SIMILAR?

They are financial statements

Each include liabilities Both are used by external users to evaluate the company

HOW ARE THEY DIFFERENT?

INCOME STATEMENT
to show managers and investors whether the company made or lost money during the period being reported.

With Regard To PURPOSE

BALANCE SHEET Value of their assets and who has the most ownership to these assets Assets, liabilities and owners equity Perm Do they have enough assets?

Revenue and expenses

Chart of Accounts

Temp Are they making enough Revenue?

Operating Statement

Types of accounts affected External users question Different name

Statement of Financial situation Revenue-Expense= Net Income How they are calculated Assets=Liabilities + Owners Equity

Revenue then list expenses

Order Of Accounts

In order of liquidity