balance sheet rev pt 2 Flashcards
1
Q
two uses of preparing an income statement
A
to determine business profoit
to control expenses and take corrective action when required
2
Q
What is break even point
A
when businesses dont gain profit or loss
3
Q
why balance sheet is labelled as at
A
Balance sheet is accurate at a given point in time. It changes with every business trasnaction
4
Q
purpose of abalnce sheet
A
allows business owners and other interested people to see what a business owns or owes at a givien point in time
5
Q
owners equity meaning
A
onwers investment or retained profit ib the business
6
Q
why income statement is labelled for the period ending.
A
incoe statement is for a specific reporting period for eg monthly, quarterly , year
7
Q
accountign equation
A
assets = liabilites _+ owners quoty
