It is laid out to clearly depict and support the accounting equation: assets = liabilities + owner ’ s equity . A classified balance sheet breaks down the assets and liabilities sections into current and noncurrent for greater transparency

The income statement reflects a firm’s performance over a period of time. The income statement reflects sales less cost of goods sold to arrive at gross profit.

net income — revenues and gains that are greater than expenses and losses. assets — tangible or intangible resources owned or controlled by a company, individual, or other entity with the intent that they will provide economic value. liabilities — probable future sacrifice of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a…. income statement — financial statement that measures the organization’s financial performance for a given period of time.