Headings for an Income Statement
An income statement is also called?
Profit and Loss Statement
The total money a business brings in from selling its goods and services.
Revenue
The money or assets the owner invests in a business
A balance sheet shows what a business owes and owns which is called?
Assets and Liability
What is the ending capital?
Cash: $1,500
Supplies: $400
Equipment: $2,100
Accounts Payable: $800
Loan Payable: $1,000
$2,200.00
An income statement measures?
profits and losses
COGS
Cost of Goods Sold
Capital/Equity is the total value of an owner’s claim on the business at the end of an accounting period after accounting for?
Investments, Profits, Losses, Withdrawals and Revaluation of Assets
Why does a balance sheet matter?
It shows the financial health of a business.
What is the ending capital?
Cash: $2,000
Inventory: $1,500
Equipment: $3,500
Accounts Payable: $1,200
Loan Payable: $2,000
$3,800.00
An income statement analyzes?
The costs a business incurs in order to operate and produce its goods and services.
Expenses
What is the ending capital for this example?
Beginning Equity: $5000
Additional Investment: $1000
Net Income: $800
Withdrawals: $600
$6,200.00
The key parts of the balance sheet.
Assets, Liabilities, Capital
What is the ending capital?
Cash: $900
Supplies: $350
Furniture: $2,000
Accounts Payable: $400
Loan Payable: $1,300
$1,550.00
An income statement supports decision making for?
Pricing, Investments, Costs and Expansion
The total profit of a business after all taxes and expenses have been subtracted from revenue.
Net Income
What is the formula for calculating ending capital?
1. Beginning balance
2. Add investments
3. Add Net Income or Net Loss
4. Subtract Withdrawals
Assets = Liabilities + Equity
Accounting Equation
If expenses are more than revenue then you have?
Net Loss