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Accounting for Non-Accountants, 9th Edition by David Horner

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03

The balance sheet

Introduction

The financial statements (also known as the final accounts) of a business consist of an income statement, a balance sheet and a statement of cash flows. Whereas the income statement measures the performance of a business over a period of time, usually one year, the balance sheet focuses on the business at a particular moment in time.

The balance sheet is constructed from the remaining balances found in the trial balance which have not already been used for the construction of the income statement. These balances are from the double-entry accounts of the business. The income statement used balances relating to the incomes and expenses of the business; the balance sheet uses the balances relating to the assets, ...

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