Inter-relationship Amongst Income statement, Statement Of Owner’s Equity,Balance sheet and Cash flow statement

In bookkeeping, there are two essential flowcharts which must be properly understood namely the “ACCOUNTING CYCLE” AND THE INTER-RELATIONSHIP AMONGST the financial statements like the Income Statement, Balance Sheet, Statement of Owner’s and Cash flow statements.

As mentioned, the acccounting cycle enable us to have a snapshot of whats should be done from source documents to preparation of financial statements whilst the below demonstrates the double entry effect which has inter-relationship between the various financial statements:

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