Comments on: Financial Statements - Income Statement http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/ The System Behind the Software Wed, 10 Mar 2010 17:37:28 +0000 http://wordpress.org/?v=2.6.5 By: Laquanda Kracke http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/#comment-2133 Laquanda Kracke Sun, 21 Feb 2010 05:25:05 +0000 http://accountingetc.wordpress.com/?p=369#comment-2133 Good Job on the articles you have here, thank you for putting your time into it! Good Job on the articles you have here, thank you for putting your time into it!

]]> By: john http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/#comment-1141 john Thu, 23 Apr 2009 12:39:24 +0000 http://accountingetc.wordpress.com/?p=369#comment-1141 Thank you. Thank you.

]]> By: admin http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/#comment-1131 admin Wed, 22 Apr 2009 20:59:28 +0000 http://accountingetc.wordpress.com/?p=369#comment-1131 The balance sheet always balances because it always includes net income. Net Income is not an account though, it is a calculated amount on the financial statements. The balance sheet always balances because it always includes net income.

Net Income is not an account though, it is a calculated amount on the financial statements.

]]> By: john http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/#comment-1128 john Wed, 22 Apr 2009 19:07:16 +0000 http://accountingetc.wordpress.com/?p=369#comment-1128 So from your explaination I am taking that till then end of year the balance sheet won't balance because Net Income is not in there. Please excuse me if I got it wrong. So from your explaination I am taking that till then end of year the balance sheet won’t balance because Net Income is not in there. Please excuse me if I got it wrong.

]]> By: admin http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/#comment-1104 admin Tue, 21 Apr 2009 19:12:36 +0000 http://accountingetc.wordpress.com/?p=369#comment-1104 The Balance Sheet doesn't actually balance until net income is posted to retained earnings at the end of the year. When you read a Balance Sheet notice the entry at the bottom for net income. Net income is not an account, it is a calculation which, on the Balance Sheet, is actually the difference between the Balance Sheet account balances for the current year. Net Income = Difference between either the Income Statement Accounts, or the difference between the Balance Sheet Accounts for the current year only. Retained Earnings = cumulative net income for all prior years - cumulative distributions to owners (stockholders) for all years. The Balance Sheet doesn’t actually balance until net income is posted to retained earnings at the end of the year.

When you read a Balance Sheet notice the entry at the bottom for net income. Net income is not an account, it is a calculation which, on the Balance Sheet, is actually the difference between the Balance Sheet account balances for the current year.

Net Income = Difference between either the Income Statement Accounts, or the difference between the Balance Sheet Accounts for the current year only.

Retained Earnings = cumulative net income for all prior years - cumulative distributions to owners (stockholders) for all years.

]]> By: john http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/#comment-1101 john Tue, 21 Apr 2009 18:37:02 +0000 http://accountingetc.wordpress.com/?p=369#comment-1101 So in the last paragraph you are saying the retained earnings will be added at the end of year (closing) but till then how can balance sheet balance without it? So in the last paragraph you are saying the retained earnings will be added at the end of year (closing) but till then how can balance sheet balance without it?

]]>