KEEP TWO SETS OF BOOKS!
A proper Income Statement shows those disbursements that are generally deductible expenses for income tax purposes, but does not show certain types of disbursements, such as principal payments on loans, or the cost of acquiring a major piece of equipment. The Balance Sheet gives you a snapshot of the business' worth, based on what are called "Generally Accepted Accounting Principles", but there is a lot that a Balance Sheet does not tell you about the true condition of your business. In short, Balance Sheets and Income Statements are exactly what your accountant wants and needs to see in order to properly prepare the business' tax returns, but they don't tell you all of the story you need to know in order to run the business on a day-to-day basis.
