The Tricky Income Statement
My sister recently learned how to solve a rubik's cube and she is trying to teach me how. But then, I realized how tricky it was since there are steps that I should follow in order to solve it.
I had the same experience when I was learning how to create an Income Statement for a merchandising business. An income statement is a document that displays the net gain or loss for a business for the same period by subtracting expenses from revenues (Bai, 2011). Through this, the business can tell it status in terms of profit. There are 3 formats that could be used in making an Income Statement, Traditional, Single-Step and Multi-Step format. What makes makes the preparation of this document is that we have to follow the multi-step format and there are things that needs to be considered when doing it. One thing that made me understand how to correctly prepare this document is the article of myaccountingcourse.com.
Visit the link at:
In this website, there was a thorough discussion of the step-by-step format that should be done in order to properly come up with a proper multi-step income statement.
Another must-see site is accountingcoach.com
Visit the link at:
http://www.myaccountingcourse.com/financial-statements/multi-step-income-statement
Just like the myaccountingcourse.com article, it provides a thorough discussion of how to prepare an income statement in multi-step format. Aside from that, this site also has a review of terms used in an income statement as well as a practice quiz which would help a bookkeeper master the preparation of this document.
There is also a video that really shows a comprehensive way on how to prepare this document. I watched this video before taking my performance task so that I would be familiar once again on ho to prepare this document. This video made me more familiar with the accounts to be used as well as their purpose.
Prepare a Multiple Step Income Statement (Financial Accounting Tutorial #32)
https://www.youtube.com/watch?v=YBWrDtBuRkA
Over all, preparing a multi-step income statement is just like solving a Rubik's cube. If you just keep on looking at it and think "Ah, I can't do this, it's so complicated..." Nothing would really happen. But in this bookkeeping journey, nothing must stop me. Matter how difficult it is, I have Sr. Randy, my block mates, and also google behind my back, who are always willing to answer my questions or misunderstanding.
