Anne Marie is the owner of Anneâs Beauty Salon, Inc. Heraccountant prepares a monthly financial statement for her business.She doesnât like to ask him questions about it. She would ratherask you as you are her friend and since she knows that you aretaking an accounting course, she asks you the following questions:1. What does net income mean on the income statement? If I haveenough cash at the end of the month then I assume I made money.This concept of net income seems complicated. 2. My accountant toldme that the balance sheet shows assets = liabilities plus equity.What does that mean? 3. I donât understand what the Statement ofRetained Earnings is all about. What is retained earnings? Howwould you respond to each of these questions?
Anne Marie is the owner of Anneâs Beauty Salon, Inc. Heraccountant prepares a monthly financial statement for her business.She doesnât like to ask him questions about it. She would ratherask you as you are her friend and since she knows that you aretaking an accounting course, she asks you the following questions:1. What does net income mean on the income statement? If I haveenough cash at the end of the month then I assume I made money.This concept of net income seems complicated. 2. My accountant toldme that the balance sheet shows assets = liabilities plus equity.What does that mean? 3. I donât understand what the Statement ofRetained Earnings is all about. What is retained earnings? Howwould you respond to each of these questions?
Unlock all answers
