Creating a basic income statement should include

The income statement subtracts the expenses incurred to generate revenue from the total revenue. The net result reflects the company’s profit or loss for the period.

Creating a basic balance sheet should include

The balance sheet lists a breakdown of current assets, current liabilities, and net worth on a specific date.

Profit and loss statements are valuable accounting tools and effective partial indicators of financial health. They can show how money comes into a company and how it is leaving through expenses of all kinds.

Process/Skill Questions