Accounting Equations

In Accounting there are multiple different Equations for many different things. You will most likely have to re-arrange the equation to get your answer.

• Assets = Liabilities + Equity
• Profit = Income - Expenses
• Assets = Liabilities + Equity + (Income - Expenses) which is also the same as Assets = Liabilities + Equity + Profit

Income Statement

An Income Statement is a financial report that shows the income, expenses and the profit of a business. When doing an income statement for a business you will need to start off by gathering your data and classifying it as either an income or expense. Then you will need to add it all to the income sheet, after adding the income you will need to add it all together and write down the total in the third column. After that you will need to put down all the expenses on the sheet and then add it all together (put the total expenses in the third column). Once you have done that you need to minus the expenses from the income. Income minus expenses will equal the total profit for the business, put the total profit in the third column.

1. Income
2. Expense
3. Profit