Join Rudolph Rosenberg for an in-depth discussion in this video From business activity to income statement, part of Financial Literacy: Reading Financial Reports.
- [Voiceover] Now let's take a few business situations…and see how they impacted the income statement.…Let's start with selling products.…As you're selling your product,…you invoice the customer by giving or sending him a paper…or electronic invoice.…This triggers automatically the addition of the revenue…and costs associated with that order…to the income statement.…The revenue is added to the revenue line,…and the cost to the cost line.…Now let's take this example a step further,…and consider the impacts on both balance sheet…and income statement.…
As you invoice your customer,…the revenue side of the invoice is impacting the…income statement by increasing the revenue line.…On the balance sheet, it's impacted first…on the assets side by the increase of the cash category…as soon as the payment is made.…On the liabilities and equity side,…the sale you just made will impact recent earnings…and taxes payable.…On the cost side, the same sale will impact…the income statement by increasing the cost line…by the cost associated with that sale.…
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- What is a financial statement?
- Reading the balance sheet
- Understanding depreciation, liabilities, and equity
- Reading the income statement
- Understanding revenue, costs, profitability, and net income
- How cash flow works
- Analyzing financial documents with context<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
Skill Level Appropriate for all
1. Financial Statements
2. The Balance Sheet
3. The Income Statement
4. The Cash Flow Statement
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