1. The Accounting Cycle Analyze Source Documents Journalize Transactions
Post to Ledgers
Prepare a Worksheet
Prepare Financial Statements
Income Statement
Balance Sheet
LESSON 7-1

2. Why do Accountants do Financial Statements?
To summarize financial information to interpret to clients
Much easier to understand than looking at ledgers
Used to make business decisions
LESSON 7-1

3. Preparing an Income Statement Revenue Expenses Net Income/Loss
LESSON 7-1
4/25/2018
LESSON 7-1
Preparing an Income Statement
Revenue
Expenses
Net Income/Loss
Component Percentages

4. INCOME STATEMENT INFORMATION ON A WORK SHEET
page 182
LESSON 7-1

5. 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

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

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

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

9. Work Together Problem Complete Workbook pages: 147, 148, 151
LESSON 7-1