Tools used in accounting included reports such as income statement, balance sheet, capital account, profit and loss records, position statements, cash flow statements and others. (Differencebetween.info, 2014) The most common reports are the income statement and the balance sheet. The income statement reports a company's profitability during a specific period of time. The time period can be any decided by the company. For example, most businesses will choose to prepare an annual income statement. On the other hand, the balance sheet includes three important parts which are assets, liabilities and also net worth in a specific period of time. The balance sheet is also known as the statement of financial position. (AccountingCoach.com,