2.

Statement of Changes in Capital

The Statement of Changes in Capital (or Statement of Changes in Equity) shows the balance of the
capital account at the beginning of the period, the

changes that occurred during the period, and the ending balance as a result of such changes. Capital is
affected by contributions and withdrawals of owners, income, and expenses. The title used for this
report varies depending upon the form of business ownership. It is called Statement of Owner's Equity
in sole proprietorships, Statement of Partners' Equity in partnerships and Statement of Stockholders'
Equity in corporations. Statement of Owner's Equity

3. Statement of Financial Position

A Balance Sheet presents an entity's assets, liabilities, and capital as of a given point in time. This report
shows the entity's financial position and condition, hence, also called Statement of Financial Position. All
asset amounts are added. All liability and capital accounts are also added. The total amount of assets
should be equal to the total amount of liabilities plus capital. Balance Sheet