Income Statement Lecture Notes Pdf

After today s lecture you should know how to.

Income statement lecture notes pdf. Prepare a balance sheet as of july 31. However at a minimum the following items are required to be presented on the income statement. The next is the income statement shown in figure 3 2 which provides information on the revenues and expenses of the firm and the resulting income made by the firm during a period. At the top of the income statement the first thing you will notice is that it tells you what period the information is for typically a month a quarter or a year.

The period can be a quarter if it is a quarterly income statement or a year if it is an annual report. The income statement and the balance sheet indicate the way in which the activities of the business have been conducted during a given period of time. The income statement shows all the revenue or income generated for the period less all expenses arriving at the period s profit or loss. Preparation of financial statements such as income statement balance sheet statement of changes in financial position statement of cash flow statement of value added.

Expenses 150 000 operating income 200 000 other income expense. This is a summary of a business s revenue and expenses for a specific period of time. Special item lawsuit settlement 125 000. Class notes chapter 1.

Income statement year ended december 31 2017 sales 1 000 000 cost of goods sold 550 000 gross profit 450 000 research and development expense 100 000 selling general and admin. What item appears on both the income statement and retained earnings statement. Be used to report income statement information. Financial accounting is charged with the primary responsibility of external reporting.

The users of information generated by financial. Prepare a retained earnings statement for the month ended july 31. Nowadays the aforesaid three functions are performed by electronic data processing devices and the accountant has to concentrate mainly. Be able to start building your group.

3 2 accounting equation in the balance sheet the assets of the business are equal to the liabilities. Net assets are total assets less total liabilities. The other key thing at the top of the income statement is to tell you whether the amounts shown are actual dollars down to the penny or whether these are truncated numbers. The net assets equal the capital and reserves in the.

Prepare an income statement for the month ended july 31.