Chapter 7 Fundamentals: Operating Statement Tests You Need to Know

The previous chapter explained analysis of balance sheet accounts. That statement reports on the balances of asset, liability, and capital accounts as of a fixed date, usually the end of a quarter or year. The operating statement is a summary of a series of transactions over a period of time, ending on a specific date. The period covered by the published operating statement reports on transactions through the same date on which the balance sheet is prepared, usually the end of the quarter or fiscal year.

These two statements represent what most people are familiar with in terms of financial reporting. The balance sheet (ending date balances) and the operating statement (summary ...

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