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  • 5 1ReviewQuestions Emmanuel

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    T3mprest
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    The document provides definitions and explanations of key accounting concepts such as revenues, expenses, equity accounts, income statements, and net income. Specifically, it defines revenues as increases in equity from sales, expenses as costs that support revenue-generating activities, and net income as the difference between total revenues and total expenses. The income statement shows revenues, subtracts expenses, and reveals profit over a period, excluding the equity accounts of Capital and Drawings.

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    The document provides definitions and explanations of key accounting concepts such as revenues, expenses, equity accounts, income statements, and net income. Specifically, it defines revenues as increases in equity from sales, expenses as costs that support revenue-generating activities, and net income as the difference between total revenues and total expenses. The income statement shows revenues, subtracts expenses, and reveals profit over a period, excluding the equity accounts of Capital and Drawings.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    6 views1 page

    5 1ReviewQuestions Emmanuel

    Uploaded by

    T3mprest
    The document provides definitions and explanations of key accounting concepts such as revenues, expenses, equity accounts, income statements, and net income. Specifically, it defines revenues as increases in equity from sales, expenses as costs that support revenue-generating activities, and net income as the difference between total revenues and total expenses. The income statement shows revenues, subtracts expenses, and reveals profit over a period, excluding the equity accounts of Capital and Drawings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Complete 5.

    1 Review Questions 1, 2, 5, 6, 9, 10 & 12


    (Page 140) (10 Marks)

    Name the new accounts in the equity section of the ledger.


    Revenues, Expenses, and Drawings.

    What is the main purpose of the new accounts in the ledger?


    Its main purpose is to provide essential information about the progress of the business.

    Identify three things that an income statement does.


    It shows those the revenue of a business, subtracts its expenses, and reveals the profit made for a
    given period of time.

    Which two equity accounts are not included on the income statement?
    The two equity accounts not included on the income statement are Capital and Drawings.

    Define revenue.
    Revenue or income is an increase in equity resulting from the sale of goods or services in the
    usual course of business.

    What is the purpose of an expense?


    The purpose of an expense is to produce revenue or to support revenue making activities.

    What is net income?


    Net income is the difference between the total revenues and the total expenses.

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