4 Flashcards
(7 cards)
1
Q
What does an income statement show?
A
Net income = Revenues – Expenses
2
Q
How is owner’s equity calculated?
A
Equity = Beginning capital + Net income – Withdrawals
3
Q
What does a balance sheet show?
A
Assets = Liabilities + Equity
4
Q
Step 1 of closing accounts?
A
Close revenue accounts to Income Summary
5
Q
Step 2 of closing accounts?
A
Close expense accounts to Income Summary
6
Q
Step 3 of closing accounts?
A
Close Income Summary to Capital
7
Q
Step 4 of closing accounts?
A
Close Withdrawals to Capital
