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 2) **Income Statement**: Revenues, expenses, and resulting profits or losses are reported on the income statement. This affects the retained earnings component of equity on the balance sheet.
 3) **Cash Flow Statement**: While not explicitly mentioned in the provided materials, the cash flow statement is impacted by changes in working capital, capital expenditures, and financing activities.
 4) **Statement of Changes in Equity**: This statement, which shows the changes in a company's equity over time, is affected by net income/loss, dividends, and any direct changes to equity accounts.
-## Questions for Review
- How does the principle of prudence affect the valuation of assets and liabilities on a balance sheet?
- Explain the difference between current assets and capital assets, providing examples of each.
- Why is working capital important, and what does a negative working capital indicate about a company's financial health?
- How does the debt-to-equity ratio help in assessing a company's financial risk?
- Walk through the process of calculating annual profit/loss, starting from gross profit.

 ## References
 - [Textbook Title](Citation.md)