12 terms

Chapter 7

Component Percentage
The percentage relationship between one financial item and the total that includes that item.
Any person or group who will be affected by an action.
Income statement
Financial statement that shows financial progress over a period of time.
Balance Sheet
Financial statement that show the condition of a business on a specific date.
Four parts of an income statement
1. Heading
2. Revenue
3. Expenses
4. Net Income/Net Loss
Four parts of a Balance Sheet
1. Heading
2. Assests
3. Liabilities
4. Owner's Equity (Capital)
Equation to find ending Capital
Beginning Captal
+ Net Income OR - Net Loss
- Drawing
= Ending Capital
What must be true for a business to be considered financially strong.
Adequate available Assets and few Liabilities
Equation to find Net Income
Revenue - Expenses
Equation to find Net Loss
Expenses - Revenue
Where does the information for the income statement come from?
Worksheet - Trail Balance and Income statement columns.
Where does the information for the balance sheet come from?
Worksheet - Trail Balance and balance sheet columns.