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Unformatted text preview: Cash is liability. Investor bought ownership in the company. 10,000 (cash) = L + 10,000 III. Financial Statements A. Income Statement i. Performance over a range of time (month/quarter/year) ii. Revenues (add up all) Expenses (add up all)= Net Income or Net Loss B. Statement of Retained Earnings i. Beginning Balance (how much money you start with)+Net Income or Net Loss (used from previous equation) - Dividends= New Retained Earnings C. Balance Sheet i. Used to determine what financial position is ii. Assets = Liabilities + Equity a. Assets= Cash, Accounts Receivable, Equipment, Delivery truck, etc. b. Liability= Earned Revenue, Accounts Payable, etc. c. Equity= Paid-in and Retained Earnings (used from previous equation)-On Retained Earnings NEVER list Revenues, Expenses, or Dividends: they are already represented in Retained Earnings in previous equation D. Statement of Cash Flow...
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