Let's continue on now with the financial statements. The textbook shows four financial statements, but at this time, I'm not going to go over the statement of cash flows (cash flow statement) because I think we need to learn that later in the semester. I don't think it's something that we need to understand right now, but it just shows the cash coming in and going out. I think the three most important financial statements right now that you need to be familiar with are the income statement, the statement of owner's equity, and then we're going to prepare a balance sheet. Now, we need to know the balances of these different accounts. The accounts, once again, are such things as cash, accounts receivable, accounts payable, your capital account, withdrawal account. We need to know the balances of all these accounts in order to prepare financial statements. Now, I'm just going to be using some numbers that I'm pulling out of my head to put some financial statements together, but on homework or in the textbook, you'll see where the numbers are coming from to plug into your different financial statements. So, now the first financial statement that you're going to want to prepare probably is the income statement. The income statement measures the profit of the business. That's really important. Think about it, if this was your business, wouldn't you want to know how much profit you're making on a monthly, quarterly, or annual basis? Well, if you're doing your books right, you'd be able to prepare an income statement in order to figure out how much profit you're making. The profit is the net income. So, let's just say that we look at all of our pizza sales, drinks, and other items we sell in our business, and...
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Financial statement schedule a Form: What You Should Know
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