Accounting › Section A · Accounting and the financial statements › Topic A.4
The four financial statements and how they connect
Accounting's finished product is a set of four financial statements. Each answers a different question about a business, and together they fit like interlocking gears: a figure from one becomes the starting point of the next. This topic introduces all four and shows exactly how they connect.
In this topic
- Starting with the finished product
- Three business structures
- The income statement
- The statement of owner's equity
- The balance sheet
- The statement of cash flows
- Cash basis versus accrual basis
- Worked example: one month, two bases
- How the statements connect
- Worked example: tracing the links
- Common mistakes to avoid
- Key takeaways
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