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CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 7-1LESSON 7-1
Preparing an Income Statement
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
INCOME STATEMENT INFORMATION ON A INCOME STATEMENT INFORMATION ON A WORK SHEETWORK SHEET page 182
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
HEADING OF AN INCOME STATEMENTHEADING OF AN INCOME STATEMENT
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22
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page 182
1. Center the name of the company on the first line.
2. Center the name of the report on the second line.
3. Center the date of the report on the third line.
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
REVENUE, EXPENSES, AND NET INCOME REVENUE, EXPENSES, AND NET INCOME SECTIONS OF AN INCOME STATEMENTSECTIONS OF AN INCOME STATEMENT page 183
11RevenueRevenue33 Revenue amountRevenue amount
44ExpensesExpenses
55Account titlesAccount titles 66 Expense amountExpense amount
88Total expensesTotal expenses 99 Total of expensesTotal of expenses
1212 Net IncomeNet Income
77 Single lineSingle line
1111 Single lineSingle line
1010 Calculate net incomeCalculate net income
1414 Double linesDouble lines
1313 Record net incomeRecord net income
22 Account titleAccount title
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
COMPONENT PERCENTAGE ANALYSIS OF COMPONENT PERCENTAGE ANALYSIS OF AN INCOME STATEMENTAN INCOME STATEMENT page 184
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
INCOME STATEMENT WITH TWO SOURCES OF INCOME STATEMENT WITH TWO SOURCES OF REVENUE AND A NET LOSSREVENUE AND A NET LOSS page 185
11RevenueRevenue
33 Revenue amountsRevenue amounts22Account titlesAccount titles
66Net LossNet Loss
77 Record Net LossRecord Net Loss
55 Total RevenueTotal Revenue
44 Total of revenueTotal of revenue
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
TERMS REVIEWTERMS REVIEW
stakeholders component percentage
page 186
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 7-2LESSON 7-2
Balance Sheet Information on a Work Sheet
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
BALANCE SHEETBALANCE SHEET page 187
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
HEADING OF A BALANCE SHEETHEADING OF A BALANCE SHEET page 187
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22
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1. Center the name of the company on the first line.
2. Center the name of the report on the second line.
3. Center the date of the report on the third line.
11
CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
ASSETS AND LIABILITIES ASSETS AND LIABILITIES SECTIONS OF A BALANCE SHEETSECTIONS OF A BALANCE SHEET page 188
44LiabilitiesLiabilities11AssetsAssets
Total LiabilitiesTotal Liabilities88
22Account titles Account titles
33Asset amountsAsset amounts
Single lineSingle line 77
66Liability amountsLiability amounts
55Account titlesAccount titles
Total of liabilitiesTotal of liabilities 99
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
OWNER’S EQUITY SECTION OF A OWNER’S EQUITY SECTION OF A BALANCE SHEETBALANCE SHEET page 189
77 Total Liab. and Owner’s Eq.Total Liab. and Owner’s Eq.
55 Total AssetsTotal Assets
11 Owner’s EquityOwner’s Equity
22 Account title Account title 33Capital amountCapital amount
44 Single lineSingle line
66Total of assetsTotal of assets
88Total of Liabilities and Owner’s EquityTotal of Liabilities and Owner’s Equity
99Compare totalsCompare totals 1010 Double linesDouble lines
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-1
OWNER’S EQUITY REPORTED IN DETAIL OWNER’S EQUITY REPORTED IN DETAIL ON A BALANCE SHEETON A BALANCE SHEET page 190
22Beginning capital amountBeginning capital amount
66DifferenceDifference
88Current capital amountCurrent capital amount
11Beginning capitalBeginning capital
33Net IncomeNet Income
44DrawingDrawing
Ending capitalEnding capital77
99Total Liabilities and Owner’s EquityTotal Liabilities and Owner’s Equity
55Single lineSingle line
