ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -For-profit businesses use four primary types of financial statement: the balance sheet, the income statement, the statement of cash flow, and the statement of retained earnings.

Detailed explanation-2: -On the left side of the balance sheet, companies list their assets. On the right side, they list their liabilities and shareholders’ equity. Sometimes balance sheets show assets at the top, followed by liabilities, with shareholders’ equity at the bottom.

Detailed explanation-3: -In short, the balance sheet is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.

Detailed explanation-4: -Financial statements can be divided into four categories: balance sheets, income statements, cash flow statements, and equity statements.