(Optional) Create a basic income statement and a basic balance sheet.
Creation of a basic income statement should include
- recording revenue
- determining cost of sales
- recording expenses
- calculating net income or net loss.
Creation of a basic balance sheet should include
- assets, including accounts receivable
- liabilities, including accounts payable
- owners’ equity.
Process/Skill Questions:
- Why are accurate financial records important?
- What are the potential consequences of not tracking expenses?
- What are the advantages and disadvantages of using software to track business records? What software packages are popular with businesses today?
- How often should a business complete an income statement? A balance sheet?
- What is the function of an income statement?
- What are possible consequences of a business neglecting to generate an income statement?
- What is the difference between an asset and a liability?
- How should a company track business assets?
- What valuable information can profit and loss statements provide?