Accounting Unit 2

Preparing an income statement

Date % Heading

List income unde rheading revenue

List costs under "operating expenses"

Revenue - Expenses = Profit

Net income

Net loss

Accounting period

Accounting Standards

Time-period principle

Matching principel

Accrual vs Cash Accounting

Journal entry formatting

Date

Name of account debited & dollar amount in debit column

Distinguish credit and debit entry

Write explanation for the transaction

Financial worth = Assets - Liabilities

Formatting

Statement heading

Maturity rate

Order of liquidity

Debit on Left, Credit on right

Formatting

Assets = Debit, Liabilities = Credit

List of all accounts with current balances

Formatting

Complete heading and date

List accounts in same order as ledger

Use balances from ledger accounts, enter amounts in either debit or credit column

Provide totals with double underline