FABM Lesson 4

• Income Statement


  A report that shows the income, expenses, and resulting profits or losses of a company during a specific time period
• Statement of Changes in Equity


  A reconciliation of the beginning and ending balances in a company's equity during a reporting period
• The statement of changes in equity is not considered an essential part of the monthly financial statements, and so is the most likely of all the financial statements not to be issued
• Balance Sheet


  A summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as government or not-for-profit entity
• Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year
• A balance sheet is often described as a "snapshot of a company's financial condition"
• Journalizing Transactions


  1. Date

  2. Transaction
• Cash


  A type of asset account
• Accounts Receivable


  A type of asset account
• Equipment


  A type of asset account
• Accounts Payable


  A type of liability account
• Owner's Capital


  A type of equity account
• Owner's Personal


  A type of equity account
• Professional Service Income


  A type of income account
• Salary Expense


  A type of expense account
• Rent Expense


  A type of expense account
• Electricity Expense


  A type of expense account
• Assets = Liabilities + Equity (Capital)
• Journal Entries of Songbird Talent Center

  1. Date

  2. Particulars

  3. PR

  4. Debit

  5. Credit
• Ledger Accounts


  • Cash
  • Accounts Receivable
  • Equipment
  • Accounts Payable
  • Owner's Capital
  • Owner's Personal
  • Professional Service Income
  • Rent Expense
  • Salary Expense
  • Electricity Expense
• Statement of Comprehensive Income (Income Statement)
• Statement of Changes in Equity
• Statement of Financial Position (Balance Sheet)
• Journalizing Accounts Receivable and Accounts Payables

  1. Date

  2. Particulars

  3. F

  4. Debit

  5. Credit
• Accounts Receivable Account
• Accounts Payable Account
• Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year
• Company name: Songbird Talent Center
• Types of Business: Servicing
• Journalizing Transactions


  1. Date

  2. Transaction
• Cash


  A type of asset account
• Accounts Receivable


  A type of asset account
• Equipment


  A type of asset account
• Accounts Payable


  A type of liability account
• Owner's Capital


  A type of equity account
• Owner's Personal


  A type of equity account
• Professional Service Income


  A type of income account
• Salary Expense


  A type of expense account
• Rent Expense


  A type of expense account
• Electricity Expense


  A type of expense account