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Answered 2009-05-30 21:34:31
An income statement is prepared to show the companies net income (or loss) after all expenses are deducted for a given period of time.
this equation is
Revenue - Expenses = Net Income (or loss) also referred to as net profit.
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What financial statement is prepared first?
Income statement.
Why an income statement prepared?
Income statement is prepared to find out the profit or loss for one specific single fiscal year. If income statement is not prepared then there is no way to find out the profit or loss information for specific period of time.
The income statement is prepared from what?
The Income Statement is prepared from the balances of some of the General Ledger Accounts. The General Ledger Accounts are split between the Income Statement and the Balance Sheet. The Account types used by the Income Statement are Revenue, Costs and Expenses.
What is the first financial statement prepared after the adjusted trail balance?
Income statement
The balance sheet should be prepared when?
before the income statement and the statement of owner's equity
The Retained Earnings Statement should be prepared?
after income statement, before the balance sheet
Budgeted income statement?
Budgeted income statement is that income statement which is prepared before the actual income statement based on standard measurement and amounts in planning stage to foresee the future of business and which is used for controlling purpose as well.
Is the budgeted income statement prepared before the sales budget?
Budgeted income statement is prepared at the last after preparing all other budgets and sales budget is the starting point of budgeting process.
What order are financial statement prepared?
Income Statement, Retained Earnings Statement, Statement of Equity, Balance Sheet, and then Statement of Cash Flows.
What is prepared first is it cash flow statement or balance sheet and income statement?
The Income Statement must be prepared first because the Current Profit or Loss (from the Income Statement) is needed in the Equity section of the Balance Sheet to make it balance. Also, the current profit or loss is the starting point to calculate Cash from Operations needed for the Cash Flow Statement.
Why would you prepare a income statement?
Income statement is prepared to find out the net profit or loss related to one fiscal year of business activities.
What does income statement include?
income statement includes expenses and incomes related to that specific single fiscal year for which that income statement is prepared. It is to clarify that only income and expenses related to that specific period is included and not for any other fiscal year.
Difference between marchindising income statement and manufacturing income statement?
Both statements are difference in this way that in merchandising income statement there is only one purchases items while in manufacturing income statement there is complete manufacturing account is also prepared to show manufacturing process as well.
How will you entry income from subsidiary in income statement?
When there is a parent child relation available then consolidated income statement is prepared in which expenses and income of parent and subsidiary are shown in one single financial statement due to which net profit or loss for whole organization is shown.
Income statement of manufacturing organization?
Income statement of manufacturing organization is same as for trading company with little difference in manufacturing company there is separate manufacturing account is also prepared.
Why is an income statement prepared for a 1 year period?
It is not necessary to create income statement for one year but even then one year is considered reasonable time period for any type of company to find out profit and loss and for which financial statements can be prepared.
What is the order that the financial statements should be prepared?
the income statement is first, followed by the the statement of owner or stockholder's equity balance sheet, and last the cash flow statement.
What budgets are prepared before the sale budget is it the budget income statement or the direct labor budget?
NONE
Does current income go into cash flow statement?
Yes in indirect method of cash flow statement , cash flow from operating activities is prepared by taking the current year income as starting point
What is an owners equity statement prepared for?
The original investment, the revenue, expenses that resulted in net income, and withdrawal by the owner.
What are the four financial statements explain their basic content and why it is important that the statements are prepared?
balance sheet,income statement,cash flow statement,retained earnings
The Statement of Owners Equity should be prepared before the income statement and after the balance sheet?
NO; The Balance Sheet is prepare after the statement of owners Equity and income statement. The balance sheet used this other two statements. The Income statment needs to be preapred before Owners Equity because the earnings will affect old the others poperation. These statements are both wrong. From what it says in my Financial Accounting book right in front of me, the income statement is prepared first, not the statement of owners equity. In the statement of owners equity, or the statement of retained earnings, net income, calculated from the income statement, is needed to be added to the beginning retained earnings to get the ending retained earnings. Dividends can also then be subtracted from that number to arrive at the final balance of retained earnings for that period. This ending balance is then presented on the balance sheet under Total Stockholder's Equity as Retained Earnings.
How do you prepare comparative income statement?
Comparative income statement is same as normal income statement with little addition of that income statement as well from which comparison is required.
What are the two categories of the income statement?
Following are two catagories of income statement: 1- Single Step Income statement 2- Multy-step income statement
Is income statement same as financial statement?
no. income statement is a only a statement in financial statements.
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