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…
Workers Get Smaller Slice of Bigger Pie
The topic covered in this article is globalization. The article talks about how many workers in Canada are in fear that globalization is a threat to their incomes and jobs. The latest to recognize this fear is the International Monetary Fund. The IMF believes that globalization and technological change have increased the size of the economic pie. This means that without globalization, our economy would not be as big as it is.…
Graham Inc. Case Summary
This case is about a company called Graham Inc. It is the month of August and Graham Inc.’s new president, Tom Graham, is looking over the numbers that came in for that month. After doing a comparison of this month with the prior month, Graham realizes that there is something fishy going on. He knows that the sales went up in the month of August as compared to the month of July. However, when looking at the end income, August’s income statement reported a loss…
Fashion Channel Harvard Case Study
Summary of the Case
The Fashion Channel (TFC), a successful cable TV network channel 24 hours a day and 7 days a week, exclusively dedicated to fashion. Founded in the year 1996.
It reached almost 80 million American households who were subscribers to cable and satellite (110 million TV households in the United States. Of these, approximately 70 million were paid to a cable TV service). According to the demographic core survey, their public was composed of women…
management’s ability to control expenses and increase profit.
There are several different documents that are considered financial statements.
These include the income statement, the balance sheet, and the statement of cash flow. Of the three, the income statement, or profit and loss statement, is used most frequently.
The P&L is a detailed summary of the hotel’s profits for a specific time period. Items that are included in this document are room revenue or food and beverage sales, and operating expenses…
types of questions:
* Is the company profitable?
* Is there enough cash to meet payroll needs?
* How much debt does the company have?
* How does the company's net income compare to its budget?
* What is the balance owed by customers?
* Has the company consistently paid cash dividends?
* How much income does each division generate?
* Should the company invest money to expand?
Accountants must present an organization's financial information in clear, concise reports that…
Earning an Income in the Digital World
Topic: Reducing unemployment through education in business and computer science.
Specific Purpose: With unemployment being as high as it is, it's time people turn to their computer as as way to provide a sustainable income.
Attention Getter: With unemployment being as high as it is, it's time people turn to the their computer as as way to provide a sustainable income.
Relevance: Many students…
liability accounts like accounts payable and expense accounts like utilities and rent. Cash and inventory are located in the asset section of the Balance sheet. Liabilities are also located on the balance sheet. Revenue and expenses are located on the income statement. Sales revenue would decrease, creating a lower gross margin.
2. High susceptibility to the state of macroeconomic conditions and consumer confidence
In times of economic hardship, customers are less likely to spend money and buy…
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Google Domestic Trends
In Millions of USD (except for per share…
statutes passed by Congress are valid only if they are consistent with it. For much of the history of the United States there was no income tax and there was some controversy over whether the Constitution permitted one. This controversy was resolved when the Sixteenth Amendment was passed in 1913.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.…
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…