Income Statement & Balance Sheet

The income statement can be expressed as an equation:

• Income =Income-Expenses
• Revenue-Expenses = Net Income (Loss)
• Revenue + Expenses = Income/Loss
• Expenses = Net Income + Revenue

The sources of money generated by the sale of products or services.

• Revenue
• Expenses
• Net Income
• Net Loss

Examples may include salaries, utilities, rent, insurance, and office supplies.

• Revenue
• Expense
• Net Income
• Net Loss

The difference between revenues and expenses is expressed as a positive or negative.

• Balance Sheet
• Net Income (Loss)
• Income Statement

This document communicates what the entity owns in terms of assets, what it owes in the terms of liabilities, and the difference between those two which represents what the owners o the company are entitled to.

• Income Statement
• Balance Sheet

Assets = Liabilities + Equity

• Balance Sheet
• Income Statement

Represents the resources owned by the company.

• Assets
• Liabilities
• Equity

The difference between what the entity owns and what it owes represents the owners' share of the company.

• assets
• liabilities
• equity

What a company owes to creditors.

• assets 
• liabilitites
• equity

Expenses represent a reduction in ___.

• assets
• revenue
• liability
• equity