Chapter 4 textbook pages

How could a worksheet help in preparing financial statements?

-The columns of a worksheet can be extended to help in preparing the financial statement. -The income statement section will only include revenue and expense accounts. -The balance sheet section will include asset and liability accounts and all equity accounts except revenues and expenses.

Third step in Financial statement

Balance Sheet- reports assets, liabilities, and stockholder equity as the last day of the period.

What is a classified balance sheet?

Classifies each asset and liability into specific categories.

First step in Financial statement

Income Statement: Reports revenues and expenses and calculates net income or net loss during the period.

Second step in Financial statement

Statement of retained Earnings- shows how retained earnings changed during the period due to net income or net loss and dividends.