Section 2The Statement of Changes in Owner’s Equity What You’ll Learn  The purpose of the statement of changes in owner’s equity.  How to prepare the.

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Presentation transcript:

Section 2The Statement of Changes in Owner’s Equity What You’ll Learn  The purpose of the statement of changes in owner’s equity.  How to prepare the statement of changes in owner’s equity. What You’ll Learn  The purpose of the statement of changes in owner’s equity.  How to prepare the statement of changes in owner’s equity.

Why It’s Important One way to evaluate how a business is performing is by tracking the increase or decrease in owner’s equity. Why It’s Important One way to evaluate how a business is performing is by tracking the increase or decrease in owner’s equity. Section 2The Statement of Changes in Owner’s Equity (cont'd.) Key Terms  statement of changes in owner’s equity Key Terms  statement of changes in owner’s equity

The Statement of Changes in Owner’s Equity The statement of changes in owner’s equity summarizes changes in the owner’s capital account as a result of business transactions during the period. The Statement of Changes in Owner’s Equity The statement of changes in owner’s equity summarizes changes in the owner’s capital account as a result of business transactions during the period. Section 2The Statement of Changes in Owner’s Equity (cont'd.)

The Statement of Changes in Owner’s Equity (cont'd.) The information to prepare this statement is found in three places: The Statement of Changes in Owner’s Equity (cont'd.) The information to prepare this statement is found in three places: Section 2The Statement of Changes in Owner’s Equity (cont'd.)  the work sheet  the work sheet  the income statement  the income statement  the owner’s capital account in the general ledger  the owner’s capital account in the general ledger

Check Your Understanding Where do you find the data needed to prepare a statement of changes in owner’s equity? Section 2The Statement of Changes in Owner’s Equity (cont'd.)