... Changes in owner's equity can occur as a result of variation in the amount of investment, net income, and drawing. The statement of owner's equity relies on the results of the income statement to determine the change in equity. The balance sheet shows the financial position of a business on a specific date. The body of the balance sheet shows assets, and liabilities and capital. The balance sheet is usually prepared after the preparation of the income statement and the statement of capital because it needs the new capital balance information. The statement of cash flow shows the difference in the owner's cash balance over a period of time. This statement is related directly to the other three statements. Its net income comes from the income statement, investments and withdrawals come from owner's equity statement, and other items such as accounts receivable, accounts payable, and etc. come from the balance ...

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