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LESSON 7-1

LESSON 7-1. Preparing an Income Statement. HEADING OF AN INCOME STATEMENT. page 182. 1. 2. 3. 1. Center the name of the company on the first line. 2. Center the name of the report on the second line. 3. Center the date of the report on the third line. Single line. 7. Revenue. 1.

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LESSON 7-1

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  1. LESSON 7-1 Preparing an Income Statement

  2. HEADING OF AN INCOME STATEMENT page 182 1 2 3 1. Center the name of the company on the first line. 2. Center the name of the report on the second line. 3. Center the date of the report on the third line. LESSON 7-1

  3. Single line 7 Revenue 1 Revenue amount 3 Account title 2 Expenses 4 Expense amount 6 Account titles 5 Total expenses 8 Total of expenses 9 Single line 11 Net Income 12 Record net income 13 Calculate net income 10 Double lines 14 REVENUE, EXPENSES, AND NET INCOME SECTIONS OF AN INCOME STATEMENT page 183 LESSON 7-1

  4. COMPONENT PERCENTAGE ANALYSIS OF AN INCOME STATEMENT page 184 LESSON 7-1

  5. Total Revenue 5 Revenue 1 Revenue amounts 3 Account titles 2 Total of revenue 4 Net Loss 6 Record Net Loss 7 INCOME STATEMENT WITH TWO SOURCES OF REVENUE AND A NET LOSS page 185 LESSON 7-1

  6. TERMS REVIEW & CONCEPTS page 186 • CONCEPTS • Adequate Disclosure is applied when financial statements contain all information necessary to understand a business's financial condition. • Going Concern is applied when financial statements are prepared with the expectation that a business will remain in operation indefinitely. • Stakeholders - - Any persons or group who will affected by an action. • Component Percentage - - The percentage relationship between one financial statement item and the total that includes that item. LESSON 7-1

  7. LESSON 7-2 Balance Sheet Information on a Work Sheet

  8. HEADING OF A BALANCE SHEET page 187 1 2 3 1. Center the name of the company on the first line. 2. Center the name of the report on the second line. 3. Center the date of the report on the third line. LESSON 7-2

  9. 1 6 Assets Liability amounts 5 Account titles 2 Account titles 4 Liabilities 7 Single line 8 Total Liabilities 9 Total of liabilities 3 Asset amounts ASSETS AND LIABILITIES SECTIONS OF A BALANCE SHEET page 188 LESSON 7-2

  10. 1 Owner’s Equity 2 Account title 3 Capital amount 4 Single line 5 Total Assets 7 Total Liab. and Owner’s Eq. 9 Compare totals 6 Total of assets 10 8 Double lines Total of Liabilities and Owner’s Equity OWNER’S EQUITY SECTION OF A BALANCE SHEET page 189 LESSON 7-2

  11. 3 Net Income Current capital amount 8 1 Beginning capital Difference 6 Beginning capital amount 2 7 Ending capital 5 Single line 4 9 Drawing Total Liabilities and Owner’s Equity OWNER’S EQUITY REPORTED IN DETAIL ON A BALANCE SHEET page 190 LESSON 7-2

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