Balance Sheet vs Financial Statement

What is a Balance Sheet?

A Balance sheet is a precise representation of the assets, liabilities, and equity of the entity. This statement is outlined by every enterprise, sole proprietorship firm or a partnership enterprise. It reveals the financial security of the enterprise.

There are 2 heads in a Balance Sheet. Namely – assets (inventory, accounts receivable), equity (share capital, capital surplus) and liability (accounts payable, customer deposits). Under the assets, all the current assets and the non-current assets of the enterprise are met while the equity and liabilities head will cover the shareholder’s equity and all the current and non-current liabilities.

What is a Financial Statement?

A statement which documents the economic pursuits of the enterprise in respect of the trading concern is known as Financial Statement. It furnishes a precise view of the solvency and data of the enterprise. It is publicly documented during the closure of the financial year, which permits its stakeholders to be aware of the performance of the enterprise. It guarantees the investors and creditors to comprehend how exactly their capitals have been employed.

This article is a ready reckoner for all the students to learn the difference between Balance Sheet and Financial Statement.

Basis Balance Sheet Financial Statement
Meaning The balance sheet is a statement that depicts the financial state of an enterprise. The financial statement is a record that keeps a track of all the financial pursuits of the trading enterprise.
Objective To furnish a snap of an enterprise’s assets possessed and liabilities owed to its respective users. To furnish a snap of the enterprise’s operations to its respective users.
Scope Narrow. Wide.

The above mentioned is the concept, that is elucidated in detail about ‘Difference between Balance Sheet and Financial Statement’ for the Commerce students. To know more, stay tuned to BYJU’S.

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