Ch 8 - The income statement Flashcards
1
Q
What is an income statement?
A
a formal accounting report on a businesses profit and loss
2
Q
How do you calculate profit?
A
net profit (loss) = revenue - expenses
3
Q
What is revenue?
A
an increase in assets of decreases in liabilities that results in an increase of owners equity
4
Q
What is an expense?
A
a decrease in assets or increase in liabilities that results in a decrease in owners equity
5
Q
When putting an income statement into a balance sheet, if there is a loss in profit how should it be recorded in balance sheet?
A
in the capital section, in the net profit
