Join Earl Kay Stice for an in-depth discussion in this video Overview of the income statement, part of Accounting Foundations.
The income statement contains two items.…Revenues and expenses.…Revenues minus expenses equal the net income.…That's it, that's the income statement.…Now, you should be saying to yourself,…"Okay, that's not that bad."…You're right.…Accounting's not that bad.…In fact, we could make a stronger statement.…Accounting's great.…But what does the word "revenue" mean?…It's kind of subtle, but important.…Remember, revenues are the amount of assets…created from the sale of goods or services.…Let me give you an example.…
Let me go back to the $100 bill that…my daughter [Therase] has.…So she's got a $100 bill, that's an asset.…Where could she have gotten that asset?…Well, she could have borrowed it from somebody.…All right, she's got it in her hand,…she could have borrowed it from somebody.…Then we call the source of that asset a liability.…Or she could have taken it from her personal…savings and she's carrying it around now,…in which case we call it paid in capital.…Or she could have gone out and done some work.…She could have mowed some lawns for her neighbor,…
- What is accounting?
- Working with balance sheets and income statements
- Determining the costs of products
- Performing break-even analysis
- Determining average and marginal tax rates
- Understanding tax deductions and credits
Skill Level Appropriate for all
1. Basics of Accounting
2. Financial Accounting
3. Managerial Accounting
4. Income Taxes
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