During the accounting cycle, accountants track, organize and record the financial dealings of a company. At the close of each period, accountants use the information they've gathered to prepare financial statements. Income statements, statements of capital, balance sheets and cash-flow statements are four common financial reports.

Income Statement
An income statement is a type of summary flow report that lists and categorizes the various revenues and expenses that result from business operations during a given period — a year, a quarter or a month. The difference between revenues and expenses represents a company's net income or net loss. Income statements are important to business owners because they represent the bottom line.

Statement of Capital
The statement of capital shows changes in owners' capital accounts over time. If you're a business owner, your capital account represents how much of your company you own. At the close of the accounting cycle, any net income becomes yours. Whether you reinvest it in the business, use some of the profit as personal income or withdraw all of it, the owner's statement of capital will reflect any changes to the capital account.