The balance-sheet is related to the income statement in the same way that:

Directions: Read the following passage and answer the given question.

Accounting is the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by the users of the information, It primarily focusses on measurement, analysis, interpretation and use of information, As an information system, accounting links an information source, a channel of communication and set of receivers. Accounting system should be designed to classify financial information on a basis suitable for decision-making purposes and to process the tremendous quantities of data efficiently and accurately. Financial accounting is concerned with providing information to external users and it is oriented towards the preparation of final statements which summarises the results of operations for selected periods of time and show the financial position of business at particular date. Management accounting is concerned with providing information to managers to carry out their responsibilities and functions such as planning, execution, control and decision- making. The end product of the financial accounting process is a set of reports called financial statement, such as, profit and loss account, balance-sheet and statement of changes in financial position. Profit & loss account shows the results of operations for a period of time, balance-sheet shows financial position on certain date and statement of changes in financial position shows where the financial resources have come and where they have gone.