FINANCIAL

STATEMENTS
ASSESSMENT
The profit or loss of an
entity is shown in the
a. Trial Balance
b. Statement of Financial Position
c. Income Statement
d. Ledger
 “
TRIAL BALANCE

3
 “
Statement of Financial Position

4
 “
Income Statement

5
 “
Ledger

6
 “
INCOME STATEMENT
Shows the profit or
loss of an entity

7
 The end product of
the accounting
process is the
a. financial statements
b. worksheet
c. t-account
d. accountant
 “
FINANCIAL STATEMENTS

9
The heading of the
financial statements
shows the following,
except:
a. name of the reporting entity
b. reporting period
c. Title of the financial statement
d. name of the accountant
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 “
NAME OF THE
ACCOUNTANT

12
In the income statement
column of the worksheet,
if total credits exceed total
debits, there is
a. profit
b. loss
c. expense
d. liability
 it is an analytical device
used to facilitate the
gathering of data for
adjustments, the preparation
of financial statements and
closing entries.
 
 “
WORKSHEET

15
 SQUASH COMPANY
Trial Balance
As of October 31, 2020
 
ACCOUNTS Debit Credit
 
Cash 200,000
Equipment 150,000
Accounts Receivable 50,000
Notes Payable 100,000
Salaries Payable 30,000
Squash Capital 220,000 16
Squash Drawings 50,000
Service Revenue 250,000
Sales 50,000
Advertising Expense 20,000
Rent Expense 30,000
Supplies Expense 50,000
Taxes and License 10,000
Utilities Expense 90,000
650,000
650,000
 “
PREPARE THE INCOME
STATEMENT

17
 SQUASH COMPANY
Income Statement
For the month ended October 31, 2020
 
REVENUES
Service Fees 250,000
Sales 50,000 300,000
 
EXPENSES
Advertising Expense 20,000
Rent Expense 30,000
Supplies Expense 50,000
Taxes and License 10,000
Utilities Expense 90,000 200,000
PROFIT 100,000
 “
PREPARE THE
STATEMENT OF
CHANGES IN EQUITY

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 SQUASH COMPANY
Statement of Changes in Equity
For the month ended October 31, 2020
 
Squash Capital, October 1, 2020 220,000
Add: Profit 100,000
TOTAL 320,000
Less: Drawing (50,000)
Squash Capital, October 31 2020 270,000
 
The following accounts were taken from the Adjusted Trial Balance
columns of the work sheet for June 30, 2020 for Guine Co.:
 
Accumulated Depreciation                             P 25,000
Fees Earned                                                       85,000
Depreciation Expense                                         9,500
Rent Expense                                                    44,000
Prepaid Insurance                                                7,000
Supplies                                                                  500
Supplies Expense                                                2,500
 

Prepare an income statement.

The balances for the accounts listed below appeared in the Adjusted Trial Balance
columns of the work sheet. Indicate whether each balance should be extended to
(a) the Income Statement columns or (b) the Balance Sheet columns.

(1) Salaries Payable (7) Utilities Expense 22

(2) Fees Earned (8) Equipment
(3) Accounts Payable (9) Accounts Receivable
(4) Owner’s Capital (10) Accumulated Depreciation
(5) Supplies Expense (11) Salary Expense
(6) Unearned Rent (12) Depreciation Expense
The following revenue and expense account balances were taken from the
Income Statement columns of the work sheet for Lesley Co. for December 31,
2019:

Depreciation Expense P 5,950

Insurance Expense 3,900 23
Miscellaneous Expense 2,200
Rent Expense 34,000
Service Revenue 102,500
Supplies Expense 4,150
Utilities Expense 6,000
Wages Expense 53,750
THANKYOU!