Profit and Loss statement is a flow statement that measures the performance of an organization over a period of time. Some key points to note in a profit and loss (P&L) statement: It is an accounting statement (Uses accrual concept): That means accountants can change it at their will (Pun intended!) It is for a [...]

Excel as a Data Store I think over the last couple of years, I would have conducted 100’s of days of workshops concepts involving excel. I love posing the following question to the participants: Do you know Excel? I think if I would have asked this question to 1000 participants, I would have got a [...]

Accounting is essentially subset of finance, in terms of discipline. However if we see the career path and the kind of role played in both the disciplines, it differs considerably.
Accounting involves data measuring, filling and mainteanance of financial statements i.e income statement, balance sheet, cash flow statement, hence financial position of a firm can be assessed. People who specialize these activities are designated as accountants.
An accountant is expected to keep track of company’s transactions, tax paid records etc accurately. The analysis and communication of financial information of various companies, is also categorized as the role performed by accountants. Many accountants also do budget analysis, financial planning, IT consulting and some legal services like auditing. The auditer typically audits the financial reports of the firms, and give independent opinion on whether the information given in the statements is accurate and free from material errors.

A Balance Sheet or Statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year.
A balance sheet is often described as a “snapshot of a company’s financial condition“.
There are four types of basic financial statements:
1. Balance sheet: also referred to as statement of financial position or condition, reports on a company’s assets, liabilities, and Ownership equity at a given point in time.
2.Income statement: also referred to as Profit and Loss statement, reports on a company’s income, expenses, and profits over a period of time.Profit & Loss account provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state.
3. Statement of retained earnings: explains the changes in a company’s retained earnings over the reporting period.
4. Statement of cash flows: reports on a company’s cash flow activities, particularly its operating, investing and financing activities.
Out of the above, balance sheet is the only statement which applies to a single point in time.