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Preparing an Income Statement: Recording Financial Information

This lesson focuses on recording financial information and preparing an income statement. Topics covered include headings, revenue, expenses, net income, and component percentage analysis.

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Preparing an Income Statement: Recording Financial Information

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  1. LESSON 7-1 Preparing an Income Statement • Recording financial information • Income statement information on a work sheet • Heading an income statement • Revenue, expenses, and net income sections of an income statement • Income statement with two sources of revenue and a net loss

  2. Competency: Understanding the Accounting Cycle for a Service Business • Objectives: • 45 Prepare financial statements for a service business • 52 Identify special transactions that require tax review LESSON 7-1

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

  4. 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

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

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

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

  8. TERMS REVIEW page 186 • stakeholders • component percentage LESSON 7-1

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