What is the difference between income statement and balance sheet approach?

The difference between the balance sheet and income statement. The balance sheet reports assets, liabilities, and equity, while the income statement reports revenues and expenses that net to a profit or loss.Click to see full answer. Herein, what is the relationship between income statement and balance sheet?The relationship between balance sheet and income statement is that the profit of the business shown in the income statement, belongs to the owners and this is shown by a movement in equity between the opening and closing balance sheets of the business. which account does not affect the balance sheet or income statement? (No revenue account or expense account is involved.) Another example of a transaction affecting two balance sheet accounts and no income statement account is a deposit for future services. The payer will debit the asset Prepaid Expenses and will credit the asset Cash. Thereof, what is a balance sheet approach? Balance Sheet Approach. An accounting term that describes a situation where debits and credits must match. The balance sheet approach is used to set expatriate compensation. There the goal is to protect or equalize an expatriate’s purchasing power while on assignment abroad.What comes first income statement or balance sheet?Financial statements are compiled in a specific order because information from one statement carries over to the next statement. The trial balance is the first step in the process, followed by the adjusted trial balance, the income statement, the balance sheet and the statement of owner’s equity.