To capture the finical information within any firm, there are four types of financial statement that are crucial to the running of the business. A balance sheet is one of them and its main purpose is to give the financial position at a specific time of a business with reference to the assets, liabilities and equity for the shareholders. As such, it can be said to the quick snap shot of the firm’s financial position at specific time. The second financial statement is the income statement. This is a document that indicates the performance of the firm with reference to the income and the expenses. As such, it shows if the firm is making a loss or a profit by basically subtracting expenses from income