Final answer:
The income statement and comparative balance sheets of the North Company detail the company's financial performance and position, respectively, showing profitability and changes in assets, liabilities, and equity over time. A bank's balance sheet lists assets and liabilities, reflecting its net worth or bank capital.
Step-by-step explanation:
The income statement and comparative balance sheets for the North Company as of December 31 for the current year and the previous year provide insights into the company's financial performance and position at those points in time. The income statement displays the company's revenues, expenses, and net income for a particular period, informing stakeholders about the company's profitability. On the other hand, comparative balance sheets present the company's assets, liabilities, and equity at two different dates, allowing for comparison and analysis of financial changes over the period.
A bank's balance sheet, as an accounting tool, lists assets such as cash in vaults and loans to customers like Hank's Auto Supply, and liabilities which include deposits from customers. The difference between the total assets and total liabilities is known as the bank's net worth or bank capital. Tracking these changes effectively, as in the example of Singleton Bank where reserves and loans changed due to a new business plan, can provide valuable insights into the bank's financial stability.