1. Financial Statements

2. Assets = Liabilities + Owner’s Equity
Balance Sheet
Assets
Cash
Petty Cash
Accounts Receivable
Supplies
Insurance
Normal Balance
Debit
Assets INCREASE on the debit side
Assets = Liabilities + Owner’s Equity

3. Balance Sheet Assets = Liabilities + Owner’s Equity
Liabilities = Accounts Payable
Normal Balance = Credit
Owner’s Equity = Capital (credit)
& Drawing (debit)

4. Sales – Expenses = Net Income
Income Statement
Sales
Expenses
Reduce O.E.
Advertising
Misc.
Supplies
Repairs
Utilities
Tax
Normal Balance Credit
Normal Balance Debit
Sales – Expenses = Net Income