Accounting: Accounting And Accounting

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Task 1 – Questions 1 Income statement-: Income statement is the financial statement that measures a company 's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities. Balance sheet-: Balance sheet is a statement at the book value of all of the assets and liabilities of a business or other organization present a particular date such as the end of the financial year. It is known as a balance sheet because it reflection accounting identity the components of the balance sheets. The balance sheet must follow the following formula: Assets = Liabilities + Shareholders ' Equity Question 2  The accounting equation-: Accounting equation tells us a easy way to understand that law assets, liabilities of …show more content…

Equity in business means an owner cannot own 100% of the business shares ownership with others and accounting for business should be separate from all personal affairs of its own. This means the person(owner) should not place any personal assets to the business balance sheet. For e.g.Expenditure of car should not be written on the balance sheet.  The revenue/cost period-: Revenue and the cost period in accounting that the company get income from normal business activities. It’s referred to normal business income that the company got by selling their product and service. Question 3  Assets The resource of a business that owner own are called assets for example building, machinery etc. In other words we can say the thing that owned by a person a regard to company and having value, commitment and legacies.  Liabilities Liabilities are the depth to be Payee by a person or company to bank or other company like if a person buys car $10000 and paid 2000 in cash then instalments of $8000 is to be paid in instalments is

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