Chapter 2 Learning Objective 6 Review
Terms in this set (22)
Which financial statement has a set date in the heading as opposed to "For Month Ended........"
Which financial statement needs to prepared first?
Which financial statement needs to be prepared second?
Statement of Owner's Equity
Which financial statement shows all revenue, expenses, and net income or net loss?
When the total expenses are greater than the total revenue, the difference is a ___.
When total revenue is greater than total expenses, the difference is a ____.
The 3 line heading for all financial statements answers which 3 questions?
Who? What? When?
The dollar amounts for all accounts on the income statement are taken directly from where?
The accounts listed on the income statement are in what order?
Revenue, then Expenses
Expenses on the Income Statement are in what order?
Same order as the Chart of Accounts
What does the Statement of Owner's Equity show?
How & why the owner's equity, or the Capital account, has changed over a stated period of time.
What would be added in the Statement of Owner's Equity?
Investments & Net Income
What would be subtracted in Statement of Owner's Equity?
Drawing & Net Loss
Where does the accountant find the net income or net loss to report on the Statement of Owner's Equity?
Where does the accountant find the Investments made on the Statement of Owner's Equity?
Where does the accountant find the withdrawals to subtract on the Statement of Owner's Equity?
Why can't the Balance Sheet be created before the Statement of Owner's Equity?
The accountant needs to know the up-to-date balance of the Capital account
Why can't the Statement of Owner's Equity be created before the Balance Sheet
The accountant needs to know if there is a profit or loss to add or subtract to the Capital account to bring it up to date.
Essentially, the Balance Sheet is the _________ _____________.
Except for the Capital account, where does the accountant get all the account balances on the the Balance Sheet?
From the Trial Balance
Where does the accountant get the balance for the Capital account to be used on the Balance Sheet?
Statement of Owner's Equity.
What must equal on the balance sheet?
Total Assets = Liabilities + Owner's Equity
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