IBT Accounting Unit Review

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An income statement is prepared for a period of time.

If revenues are greater than expenses, you have a net loss.

Temporary accounts are “closed out” at the end of the year.

Revenues - Expenses = Owner’s Equity

If Assets total $500,000 and Liabilities total $450,000, Owner’s Equity is $950,000.

If Assets total $500,000 and Liabilities total $450,000, Owner’s Equity is $50,000.

An income statement shows the assets, liabilities, and owner’s equity of a business.

If expenses are greater than revenues, you have a net loss.