Accounting for Beginners #4 _ Income Statement _ Revenue - Expenses

What's going on everybody, CPA Strength Jonathan Dorn, CPA, licensed CPA, state of Florida. We got accounting tips 4. We're going to do some stuff and then work into the income statement. So hopefully this won't be too long. Let's get it in. We are, we're going to erase, we're going to erase this because there's nothing else that you can remember. What is it? D.C. Adler. Okay. Let's go. D.C. Adler. Now, if you don't know what those are, watch the first one, please. Debit credit, asset draw, expense, credit, liability, equity, revenue. Did I say that right? Debit credit, asset draw, expense, liability, equity, revenue. D.C. Adler. Okay. I did want to change just one example from last time because I just want to have a positive income statement. So I want to change this, we want to change that to 500, okay? The income we got. Oh, I'm sorry. We want to change the income to 800 because I just, I want a positive, positive income statement. So we're going to say that for the service we did, we got $800. All right. So anyways, obviously these are positive sides, debits, credits. We did these journal entries in the third video. So I'm going to put a line down here and we're going to have debits on this side and we're going to have credits on the right side. That's pretty much all a journal entry is doing is just separate debits and the credits. So I'm going to go through each journal entry and explain and label them, you know, if they're an asset, draw or distribution, expense, liability, equity or revenue. So we're just going to go down the list and label these. So anyways, what do I always say first? Let's do cash first because, well, every example I have has cash, but mostly every example in real life will have cash in it too. So if you know what cash is, what category cash is, and every journal entry is going to be one of these six categories. So we know what cash is, right? Cash is money. It's an asset. Cash is an asset. So we know this is an asset. We know this is an asset. And we know this is an asset. Okay. We also know a truck is an asset. A loan, a loan is a liability. You owe somebody. It's a payable. Now remember, every single liability will have a payable in it. Payable. Owe. So anyways, we know the loan is you owe somebody the loan because remember we borrowed $10,000 from the bank. So this is a liability. That's a liability. What was rent? We paid that in hopes of making some money. That's an expense. What's the service income? We got money coming in. That is, that's a revenue. And now we've got, the only one we don't have left is a draw, a blur, or a distribution. So that's going to be this. And it's pretty much the other side of equity. But we know the draw is going to be a draw. Is the draw a draw account? So let's do the income statement. Now the income statement like it implies is how much income you made during, it is from a certain period of time. So usually the income statement I'll run from the calendar year like most businesses will be. So we'll run from say January, it'll run from January 1st, 01, 01, we'll say 15, I'm in 15 now, through 12, 31, 15. And that'll be the income statement. Certain period, certain period of time will be the income statement. And this is the income statement here. But anyways, you're going to have, what the income statement is, the income statement is revenues minus expenses. So we got $800, we got service, income, $800 minus $500 for rent. Oh and this is just kind of I guess accountant speak for a negative number, you put the brackets around it. So just put a negative in front. So we have $300 of net income, net income. So anyways there's a very abbreviated income statement and now when you start next year you would start a new income statement. Income statement is only for that certain period. Anyways, that'll be it for this one. The next one we'll go over the balance sheet.