Accounting1 Chapter 5 (The Income Statement)
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Last updated 7:38 PM on 8/26/21
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8 Terms
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Income Statement
Shows if a business made a profit or loss and if it's profitable. As well as the expense/Revenue details
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Revenue
An increase in equity
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Expenses
The cost associated with producing revenue
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Drawings
A decrease in equity (usually bank)
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Capital
The sum of the equity figure from the beginning of the fiscal period plus the owner's capital
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Time period concept
Companies must use fiscal periods of equal length when making financial progress
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The matching principal
Expenses must be recorded in the period in which the revenue is recognized
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