Income Statement: Has all your revenues, gains, expenses, and losses and tells you what kind of money you made during a whole period. All of the components come up with a grant total that get plugged into Retained Earnings on the balance sheet.
Other Comprehensive Income is like a holding cell for gains and losses that aren't ready to join society. Mostly they are things that change value frequently and will not be sold in that period. The purpose of OCI in my opinion is to get an idea of the value at a specific period in time on all this random stuff that doesn't often get cashed out. For example you don't plan to sell your companies pension anytime soon but its nice to know what is worth. All this OCI stuff which is closed out at the end of the year to AOCI a component of equity on the balance sheet.
Balance Sheet is a list of all your assets, liabilities, and equity at one day in time. Again IS items get represented in Retained Earnings and OCI items in AOCI….both components of equity. CAROT =equity……Common Stock, APIC, Retained Earnings(every single penny earned on every income statement not spent), OCI-Accumulated(every little OCI adjustment that didn't turn into an actual gain or loss on the income statement over time).
Statement of Cash Flows shows what the company is spending cash on. There is an operating section which is shows cash spent/acquired on income statement items. The financing section is cash borrowed/attained on equity and long term liabilities used to finance your business. Investing is money spent/attained on the sale of your fixed assets including all of your investments. SO it basically has all the cash transactions from your BS and IS. This is a general description as there is wierd stuff like dividends received is operating and all the interest items are operating.
I think looking into year end closing transactions would be a big help.
I spoke to an ancient wise man who sent me on a mushroom induced journey through an ancient forest to find the key to passing the CPA exam. A talking spider monkey told me to throw the last of my drinking water in the dirt to find what I was looking for. So I followed his instructions and the following message appeared in the soil:
"Do 5000 multiple choice questions for each section"
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