A balance sheet has 4 sections. They are:

Presentation on theme: "A balance sheet has 4 sections. They are:"— Presentation transcript:

A balance sheet has 4 sections. They are:
Heading, Assets, Liabilities, and Owner’s Equity

The owner’s capital amount reported on a balance sheet is calculated as:
For a Net Income: Beginning Capital + Net Income – Drawing For a Net Loss: Beginning Capital – Net Loss - Drawing

The formula for calculating net income is:
Total Revenue Minus Total Expenses

The net income calculated for the income statement and the net income on the work sheet must be
The Same

The _______ _______accounting concept is applied when financial statements contain all information necessary to understand a business’s financial condition. Adequate Disclosure

The amount matches the Net Income/Net Loss on the Worksheet.
On an Income Statement, double lines are ruled across both amount columns to indicate ___? The amount matches the Net Income/Net Loss on the Worksheet.

For a service business, the ______ reported on an Income Statement includes components for total expenses and net income. Revenue

Total Expenses Divided by Total Sales
The formula for calculating the total expenses component percentage is ____? Total Expenses Divided by Total Sales

The financial condition of a business refers to its financial ______.
Strength

The owner’s equity section of a balance sheet may report different kinds of details about _____ _____. Depending on the need of the business. Owner’s Equity

Divide the amount of each component by the total amount of sales.
Component percentages on an Income Statement are calculated by ________________? Divide the amount of each component by the total amount of sales.

A component percentage is the ______ relationship between one financial statement item and the total that includes that item. Percentage

An Income Statement reports information over a period of time, indicating the financial progress of a business in earning a ______ or ______. Net Income or Net Loss

The Matching Expense with Revenue accounting concept is applied when the _____ earned and the expenses incurred to earn that revenue are reported in the same fiscal period. Revenue

Information needed to prepare an Income Statement comes from the _______ columns of a worksheet.

An amount written in parentheses on a financial statement indicates a/an ________.
Net Loss

A _____ _____ reports financial information for a specific date and includes the assets, liabilities, and owner’s equity. Balance Sheet

When a business has two different sources of revenue, do you complete one or two Income Statements?

The date on a monthly Income Statement prepared on July 13 is written as `
For Month Ended July 13, 2011

The Net Income or Net Loss on the Worksheet.
The amount of Net Income calculated on the Income Statement should equal ______? The Net Income or Net Loss on the Worksheet.

Accounting Period Cycle
Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept _____. Accounting Period Cycle

Information needed to prepare an Income Statement’s Revenue section is obtained from a worksheet’s Income Statement _____ column. Credit

A balance sheet reports a business’s financial condition on a _____ date.
Specific

Net Income divided by Total Sales.
The formula for calculating the net income component percentage is ________. Net Income divided by Total Sales.

Balance Sheet Credit Column
Information needed to prepare the balance sheets liabilities section is obtained from a worksheet’s Balance Sheet ______ column. Balance Sheet Credit Column

Assuring the financial statements contain all information necessary to understand a business’s financial condition is an application of the accounting concept ___________. Adequate Disclosure

You will also have to prepare an Income Statement and Balance Sheet
You will also have to prepare an Income Statement and Balance Sheet. A partial worksheet will be provided. Remember, capital on balance sheet is not taken form worksheet—YOU MUST CALCULATE THE AMOUNT.