There are three essential accounting statements that apply to all businesses, regardless of size.  They are the Balance Sheet, the Income Statement (which may also be called an Operating Statement or an Income and Expense Statement or a Profit or Loss Statement) and the Cash Flow Statement.  Each displays a different facet of a business’ financial health, but they are interrelated.  Even though the small business owner delegates the preparation of these statements to a bookkeeper, accountant or CPA he or she must be intimately familiar with both the makeup and the conclusions of these statements.  We hope that this summary review of accounting concepts will be helpful to small business owners or those just beginning the planning process with the goal of starting a small business.

Accounting Concepts for Entrepreneurs