Preparing an Income statement
Balance Sheet information on a Worksheet
Income Statement
Balance Sheet
100
What is an Income Statement?
Something that reports financial information over a specific period of time, indicating the financial progress of a business in earning a net income or net loss
100
What is the accounting equation?
Assets= Liabilities + Owner's equity
100
Heading of an Income statement
1. Name of the company
2. Income statement
3. Date of report
100
Heading of a Balance Sheet
1. Name of Company
2. Balance Sheet
3. Date of report
200
What is Component Percentage?
The percentage relationship between one financial statement item and the total that includes that item
200
Equation for finding current capital when net income
Capital Account balance - Net Income - Drawing account balance = Current Capital
200
What the 4 sections an income statement has for a service business?
1. Heading, 2. Revenue, 3. Expenses, 4.Net income/loss
200
The four sections of a balance sheet
Heading, Assets, liabilities, owner's equity
300
When is Adequate Disclosure applied?
When financial statements contain all information necessary to understand a business's financial condition
300
Equation for finding current capital when net loss
Capital Account balance - Net loss - Drawing account balance = Current Capital
300
Equation for the Total expenses component percentage
total expenses divided by total sales equals component percentage
300
What a balance sheet reports
Financial information on a specific date, indicating the financial condition of a business
400
What is a Stakeholder?
Any person or group who will be affected by an action
400
Where is the information needed to prepare a balance sheet found?
Account titles are found in the work sheet's account title column, Account balances are obtained from the work sheet's balance sheet column
400
Equation for net income
Net Income divided by total sales equals Component Percentage
400
Where does a balance sheet get information about assets, owner's equity, and liabilities from?
General Ledger
500
The Accounts used in an Income statement
Revenue: Sales
Expenses: Advertising Expense, Insurance Expense, Miscellaneous Expense, Rent Expense, Supplies Expense, and Utilities Expense
500
What does a balance sheet look like?
500
What does an income statement look like?
500
What are the 2 types of equities reported on a balance sheet?
Liabilities and owner's equity