For bookkeeper, it is important to understand that there are a few ways of preparing the format of an Income statement. Basically, there are two formats namely the Single Step Format and Multiple-Step Income Statement. Below are the format for both the Single step and Multiple-Step Format of Income Statement. Also mentioned are their advantages and disadvantages. Format of [...]
Continue reading about How to prepare the Single Step & Multiple-Step Format Of The Income Statement
Snapshot of how to prepare the Income statement,Owner’s equity statement and Balance sheet statement
Append below, a simple snapshot of preparing the following financial statements: (a) How to prepare the Income Statement: All temporary or nominal accounts relating to incomes and expenses are closed by using closing entries and transferred to the Income Statement/Summary Journalize the closing entries as follows: For all Revenue accounts: Debit Revenue Account Credit Income [...]
Further to Part 1 where we understand what is an Income Statement. This article looks at what are inside the Income Statements: COMPONENTS IN THE INCOME STATEMENT: Net Revenue A Cost of Goods B Gross Margin C=A-B NET REVENUE: NET REVENUE are the list prices of the goods and/services less any discounts offered to the [...]
Continue reading about Components Of An Income Statement(Part2of2)
From the bookkeeping perspective, once we have put in all the relevant adjustments, we can then from the post adjusted trial balance to extract/prepare the Income Statement. Before preparing even this Income Statement ( which was previously called by many as Profit & Loss Account/Statement), we need to know what really is this Income Statement. [...]
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