Financial Statements for a Sole Proprietorship Making Accounting

Section 1 The Income Statement What You’ll Learn = Why financial statements are important

Section 1 The Income Statement (cont'd. ) Why It’s Important Financial statements provide the

Section 1 The Income Statement (cont'd. ) The Seventh Step in the Accounting Cycle:

Section 1 The Income Statement (cont'd. ) The Income Statement The income statement reports

Section 1 The Income Statement (cont'd. ) Check Your Understanding What three financial statements

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Financial Statements for a Sole Proprietorship Making Accounting Relevant Financial statements provide information to owners and managers about how the business is changing as a result of operations. How might these financial reports help the owners and managers make business decisions?

Section 1 The Income Statement What You’ll Learn = Why financial statements are important for business decisions. = The purpose of the income statement. = How to prepare an income statement.

Section 1 The Income Statement (cont'd. ) Why It’s Important Financial statements provide the essential financial information necessary for sound management decisions. The income statement communicates important details about profitability to a business owner. Key Terms = financial statements = income statement

Section 1 The Income Statement (cont'd. ) The Seventh Step in the Accounting Cycle: Financial Statements The primary financial statements prepared for a sole proprietorship are the income statement and the balance sheet. A third statement, the statement of changes in owner’s equity, is also often prepared.

Section 1 The Income Statement (cont'd. ) The Income Statement The income statement reports the net income or net loss for the period.

Section 1 The Income Statement (cont'd. ) Check Your Understanding What three financial statements are prepared for a sole proprietorship?