Final answer:
A balance sheet reports a firm's financial condition on a specific date, and an income statement summarizes revenues, costs, and expenses for a specific period. Privately owned firms use these financial statements to track profits and assess financial health, including budget deficits or surpluses.
Step-by-step explanation:
The statement that reports a firm's financial condition on a specific date is the balance sheet, whereas the statement that summarizes revenues, costs, and expenses for a specific period is the income statement.
The balance sheet provides a snapshot of the company's assets, liabilities, and shareholders' equity at a specific point in time. In contrast, the income statement details how the revenue translates into net income over a fiscal period, considering both revenue and expenses to demonstrate the performance of the business.
Privately owned firms are focused on generating profits, which are calculated by subtracting costs from revenues. Accounting profit is more restrictive as it includes only explicit costs, while economic profit takes both explicit and implicit costs into account. To understand the financial health of a company yearly, one can also look at the budget deficit or surplus, which indicates the difference between tax revenue collected and spending over a fiscal year.