what is difference bt Balance sheet and Income statement?


5 Answer(s)


Balance Sheet and Income Statement, are the most important Financial Statement of a company, through which anyone body can determine what is the status of the company. Although both Balance Sheet and Income Statement are Financial Statements, still they are as different as chalk is from cheese. The main difference is

Income Statement shows the revenue and expenses for a financial year and calculates the profitability of the company at the end of the financial period.

Balance Sheet shows only the Assets and Liabilities of a company, which shows the entire holdings and the debt liabilities of the company. In short it shows the financial position of the company for that particular period.

A few other differences are highlighted below:

Income statements describes the current year performance, while Balance Sheet shows the overall performance of a company

Income Statement usually depicts the company's performance over a period of time, say annually, quarterly, half yearly, etc. But Balance Sheet shows the position of a company for a particular point in time. For example, the Income Statement will always be named 'Income Statement for the period of January 2013 - March 2013' whereas the Balance Sheet will be named 'Balance Sheet as on 1st January 2013'

While the Income Statement only needs a few calculations, the balance Sheet must be prepared in accordance with the rules agreed upon in the company's MOA.

A balance sheet is a summary of the financial balances of a company at a GIVEN point in time.

An income statement is one of the financial statements of a company and shows the company's revenues and expenses DURING a particular period of time.

A Balance Sheet depicts company's financial position on a particular date eg Balance Sheet of XYZ Co. dated 12-10-2013. where as Income Statement is for particular period say Income Statement for the Month of January 2013. or Income Statement for Year 2012.

The Balance Sheet is a summary of Financial balances of a company at a given point in time. State of financial position.

The Income Statement shows the companies revenues and expenses during a particular period of time. Profit and Loss account


Balance Sheet shows the financial position of a company at any point in time, in other words, it shows how finance-able a business is while Income Statement shows how profitable a business is over a period of time.