The income statement lists revenues, expenses, gains, and losses, which make up net income (or net loss) In addition to showing net income or net loss, the statement of owner’s equity shows the investments by and distributions to owners

The balance sheet lists assets, liabilities, and owners’ equity Financial statements provide financial information to stakeholders to help them in making decisions

gain — increase in organizational value from activities that are “incidental or peripheral” to the primary purpose of the business. loss — decrease in organizational value from activities that are “incidental or peripheral” to the primary purpose of the business. balance sheet — financial statement that lists what the organization owns (assets), owes (liabilities), and is worth on a specific date. net income — when revenues and gains are greater than expenses and losses.