ASSETS, LIABILITIES, CAPITAL,

REVENUE AND EXPENSES OF THE

FINANCIAL STATEMENTS

Fundamentals of Accounting, Business

and Management 1
 TYPES OF FINANCIAL STATEMENTS
 Statement of Financial Position or Balance
Sheet
 Statement of Comprehensive Income or
Income Statement
 Statement of Changes in Owner’s Equity
 Statement of Cash Flows
 Notes to Financial Statements
 ACCOUNTING EQUATION

Economic
resources
owned by the
business
expected for
future gain.
ACCOUNTING EQUATION

Debts,
obligations to pay
and claims of the
creditors on the
assets of the
business
ACCOUNTING EQUATION

Interest of
the owners
on the
business
 ACCOUNTING EQUATION

650,000 340,000 310,000

600,000 295,000 305,000

967,000 307,000 660,000

 TYPICAL ACCOUNT TITLES USED
Assets
CURRENT NONCURRENT
Cash Long Term Investments
Cash equivalents Property, Plant and
Equipment
Marketable securities
Land
Accounts Receivables Building
Allow for bad debts Equipment
Furniture and Fixtures
Inventories Accumulated Depreciation
Prepaid Expenses Intangible Assets
 TYPICAL ACCOUNT TITLES USED
Liabilities
CURRENT NONCURRENT
Accounts Payable Mortgage Payable -
collateral
Notes Payable
Bonds Payable –
Loans Payable certificate of
Utilities Payable indebtedness under the
seal of corporation, with
Unearned revenues terms of payments and
Accrued Liabilities interest
 TYPICAL ACCOUNT TITLES USED
Owner’s Equity

Capital – bears the name of the owner

Drawing – withdrawal
Income Summary – temporary account
used to close income and expenses
 TYPICAL ACCOUNT TITLES USED
Income and Expenses

Service Income Depreciation

Salaries expense expense

Utilities expense Bad debts

expense
Supplies expense
Interest expense
Insurance
expense
 SINGLE-STEP INCOME STATEMENT
Prepare Income Statement based on the data from Lucy
Repair Shop for the month of August
Repairs Revenue P200,000
Rent Income 10,000
Salaries and Wages 35,000
Utilities Expense 14,000
Supplies Expense 11,000
Depreciation Expense 2,000
Miscellaneous Expense 3,000
 SINGLE-STEP INCOME STATEMENT
Lucy Repair Shop
Income Statement
For the Month Ended August 30, 2017
Repairs Revenue P200,00
Other Income 10,000
Total Income P210,000
Expenses
Salaries and Wages P35,000
Utilities 14,000
Supplies 11,000
Miscellaneous 3,000
Depreciation 2,000 65,000
Net Income P145,000