Income summary Essay

Submitted By O585751

Words: 333

Pages: 2

Open Document

In the financial industry there are four statements that need to be prepared by the businesses at the end of each quarter and end of company’s fiscal year. There is the balance sheet, statements of cash flow, statements of retained earnings and the income statement. Within this essay, I will be explaining on how and why we use one of the statements; which is income summary. I will also be describing if the account is a temporary or permanent account. The following is the definition of income summary; it’s a temporary account into which revenues and expenses are transferred prior to their final transfer into the capital account. The income statement is a summary of a business expenses and revenues during a specific period of time; usually it can be quarterly or one year statements. Income statement is also known by the term of Profit and loss, statement of earnings or statement of operations. The report summarizes the net income (or net loss) for the period by collecting the sum of all the expenses (a debit) and the sum of all the revenues (a credit). The format of the income statement or the profit and loss statement will vary according to the complexity of the business activities. However, most companies will have the following elements in their income statements:
A. Revenues and Gains
1. Revenues from primary activities
2. Revenues or income from secondary activities
3. Gains (e.g., gain on the sale of long-term assets, gain on lawsuits)
B. Expenses and Losses

Essay on Generally Accepted Accounting Principles and Income Summary Account

expected to flow to the entity Liabilities are debts that are payable to outsiders called creditors Equity is the residual interest in the assets of the entity after deducting all of its liabilities Income refers to all increases in equity other than investments by owners Revenue is that part of income arising from ordinary activities Expenses decrease equity by using up assets or increasing liabilities in order to deliver goods or services to customers Apply the accounting equation to analyse transactions…

Words 3448 - Pages 14

High Income Don T Bring You Happiness Summary

In the articles titled ‘High Incomes don't bring You Happiness’ by Caitlin Kenney and the article titled ‘You Can Buy Happiness, If It's An Experience’ by Maanvi Singh, some of the advantages presented of buying material items are that if you want something and it costs a lot of money, you are motivated to work for the money to buy the item. And some of the disadvantages of buying material items are that it doesn't necessarily bring happiness and if it does, it only lasts a very short period of time…

Words 161 - Pages 1

The Accounting Cycle Essay

performance and the value a company, it helps you measure the company, and it will help you manage your company when you can no longer be hands on with all the details. Included in the financial statement are the income statement, owner’s equity statement, and the balance sheet. The income statement calculates service revenue and all the expenses from the adjusted trial balance. The balance sheet calculates all the assets, liabilities, owner’s capital,…

Words 812 - Pages 4

Principles Of Accounting

Retained Earnings, Common Stock, Dividends/Revenue(contra-equity accounts) Formula: Capital – Dividends(Drawings) + Revenue – Expenses OR Assets + Owner’s Drawings + Expenses = Liabilities + Owner’s Capital + Revenue. -Financial Statements: Income, Retained Earnings, Balance Sheet, Cash Flow ^BALANCE SHEET- Current assets are those to be used or turned into cash within the upcoming year, NonCurrent assets are those that will last longer than one year.…

Words 956 - Pages 4

Ac1220 2 Essay

accounting worksheet given on the following page to make the necessary adjusting entries and to compute the adjusted trial balance, income statement, and balance sheet amounts. Key the adjustments by transaction letter. Requirement 3, continued JAKE’S COMPUTER REPAIR SERVICE WORKSHEET MONTH ENDED MARCH 20x1 Account Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Debit Credit Debit Credit Debit…

Words 955 - Pages 4

Generally Accepted Accounting Principles and Trial Balance Essay

“temporary accounts” because they are closed at the end of the year. All other accounts are permanent accounts. Steps in preparing closing entries: 1. Close revenues to Income Summary. 2. Close expenses to Income Summary. 3. Close Income Summary to RE. 4. Close dividends to RE. Income Summary – a temporary account only used during the closing process. Post-closing trial balance – shows all permanent accounts. Cash Basis Accounting versus Accrual Basis Accounting:…

Words 439 - Pages 2

Essay about Balance Sheet and Trial Balance

•Post-closing trial balance •Reversing entries •The accounting cycle Using a Worksheet •Adjustments entered •Work sheet columns •Preparing financial statements from a work sheet •Closing entries Appendix 3AUsing Reversing Entries •Accruals •Prepayments •Summary of reversing entries •Monthly statements, yearly closing 2 The Accounting Information System Accounting Information System •Basic terminology •Debits and credits Accounting Cycle •Identifying and recording •Journalizing •Accounting equation •Posting…

Words 1733 - Pages 7

Product Satisfaction In The Philippines

60 40 180 32 24 17 73 Grand Total 80 60 40 180 CUSTOMER PROFILE FOR EACH PRODUCT Product TM195 Education 14 15 14 12 13 14 14 13 Age 18 19 19 19 20 20 21 21 Income 29562 31836 30699 32973 35247 32973 35247 32973 Miles 112 75 66 85 47 66 75 85 Summary Tables One-‐Way Summary Table Count Gender Gender Female Male Total TM195 Categorical Variables Marital Status Gender…

Words 4846 - Pages 20

Generally Accepted Accounting Principles and Account Debit Credit Essay

Depreciation-Equipment $180 Insurance Expense (1 month) $150 Prepaid Insurance $150 Supplies Expense $580 Supplies $580 Salaries and Wages Expense $400 Salaries and Wages Payable $400 31-Jul $3,010 $3,010 (e) Income Summary $3,600 $7,900 $4,300 $7,900 $7,900 Retained Earnings $600 0 $4,300 Balance $3,700 Dividends $600 $600 Service Revenue $7,900 $3,700 $2,500 $1,700 $7,900 $7,900 (f) Pro Window Washing Inc. Adjusted Trial Balance…

Words 653 - Pages 3

Essay on MATH 533 Project Part A

variables, ”income”, “size”, “year” and “credit balance”. Each of them has a kind of relation that can link together, and because of that we can be able to pair out 10 different pairs of variables. In the following report, we are going to discuss 3 set of individual variable and 3 pair of variable by using statistic information. The 1st individual variable is the “Location” and because it is a qualitative variable by which we may not shown the result by using the five numerical summaries. However…

Words 836 - Pages 4