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Unfortunately, equity investments are not included unless they are cash
equivalent such as preference shares acquired before their maturity period.
2.1.5 The Relationship between Balance Sheet, Income Statement, and Statement
of Cash Flow.
The following figure shows the relationship among the balance sheet, income
statement and the statement of cash flow (Horngen & Harrison 2007, p.785),
which then will be supported by an example of Dell’s statements (Wild,
Subramanyan & Halsey 2007, p.21).
Dec 31,2007
(a point in time)
For year Ended
December 31, 2008
(a period of time)
December 31, 2008
(a point in time)
Income Statement
Balance
Sheet
Statement of Stockholder’s
equity
Balance Sheet
Statement of cash flows
Figure 2.1: Timing of the Financial Statements
From: Accounting 7th edition (2007, p.785)
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