Review of Financial Statements

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the: 

• Balance Sheet
• Statement of Retained Earnings
• Statement of Cash Flows
• Income Statement

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

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

• Revenue
• Expense
• Net Income
• Net Loss

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

What are liabilities?

• The money paid to employees.
• Costs of operating a business.
• The act of buy items. 
• What a company owes.

What is owner equity?

• The value of the business after liabilities are subtracted from assets; the value of the owner's investment in the business.
• What a company owes.
• Documents that are used to record and analyze the financial performance of a business.
• All income a company receives overtime.

This document is known as what?

• Account Equation

• Balance Sheet

• Income Statement

• Bank Statement

Depreciation

• The loss of value of an asset over time

• Moving an item on the Income Statement down toward Net Income

• Sales Revenue - Cost of Sales

• How an investor feels while watching the stock market fall

Cash Flow =

• Profits given to owners

• Drain on cash due to excessive debts

• Movement of cash into and out of a business.

• The tendency of expenses to grow over time