Common Stock Income Statement Or Balance Sheet

Common stock is a liability account in nature and it is the amount which is payable by business back to it s owners that s why it is shown in balance sheet and not in income statement.

Common stock income statement or balance sheet. The income statement can be run at any time during the fiscal year to show a company s profitability. The balance sheet provides a snapshot of the financial condition of the company on a specific day usually december 31 whereas the income statement reports the amount of revenue a company earned over a specific time period usually for a year. It lists only the income and expense accounts and their balances. The balance sheet measures the amount of common stock at the end of a reporting period whereas the statement of shareholders equity tracks any increase or decrease in common stock over the reporting period.

The income statement totals the debits and credits to determine net income before taxes. A company with strong income statements year over year will generally build a healthy balance sheet but it is possible that it may have a strong balance sheet but weak income or vice versa. Common stock is part of both the balance sheet and the statement of shareholders equity. The income statement or profit and loss report is the easiest to understand.

A balance sheet lists assets and liabilities of the organization as of a specific moment in time i e. Income statement and balance sheet overview.