The income statement reflects flows of money over a period of time. The balance sheet represents stocks of money at a point in time.

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The income statement shows financial performance over a specific period, such as a month, quarter, or year, while the balance sheet shows a company's financial position at a specific point in time, typically at the end of a reporting period. The income statement reflects inflows and outflows of money during that period, while the balance sheet shows the company's assets, liabilities, and equity at a specific moment.

The Income Statement Reflects Flows of Money Over a Period