The balance sheet reports a company’s assets, liabilities, and owner’s equity as of the last instant of an accounting year. Generally, the amount of the owner’s equity will have changed from the previous balance sheet amount due to

• the company’s net income
• the owner’s additional investments in the business
• the owner’s withdrawals of business assets

If the owner did not invest or withdraw, the change in owner’s equity is likely to be the amount of net income earned by the business. The revenues, expenses, gains, and losses that make up the net income are reported on the company’s income statement.