Financial class 03

Financial class 03 - Chapter 1: Reporting About Resources...

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Chapter 1: Reporting About Resources (continued) Financial Statements The information provided by accounting systems is often communicated in the form of financial statements. Three common financial statements are the income statement, statement of retained earnings, and balance sheet. The information in the financial statements is useful in answering four common questions about companies. What are the company's resources? Where did the company get its resources? What did management do with the company's resources? What did the company do with the resources generated by management? Income Statement
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Prepare a financial report, called an income statement , designed to provide information to help answer the following question. What did management do with the company's resources in August? Guitar Lessons Corporation Income Statement For the Month Ended August 31 Fees Revenue Expenses Supplies Expense Net Income Guitar Lessons Corporation Income Statement For the Month Ended August 31 Fees Revenue $2,400 Expenses Supplies Expense $500 Net Income $1,900
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Fees revenue of $2,400 shows that management brought in $2,400 of resources by providing services to customers in August. Supplies expense of $500 shows that management used up $500 of resources in providing services to customers in August. Net income of $1,900 shows that management increased the company’s resources by $1,900 during the month of August. Statement of Retained Earnings Prepare a financial report, called a statement of retained earnings , designed to provide information to help answer the following question. What did the company do with the resources generated by
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This note was uploaded on 10/09/2011 for the course ACCT 60.201 taught by Professor Monty during the Spring '11 term at UMass Lowell.

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Financial class 03 - Chapter 1: Reporting About Resources...

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