C214 WGU Dr. V's Webinar

Elements of Financial Statements (8 Questions) Answer Revenue Expenses Income Assets Liabilities Equity Revenue Answer Amount generated by sale of products and services Expenses Answer Amount incurred to manufacture products Income Answer The difference between revenues and expenses Liabilities Answer Amounts owed by the company to others Equity Answer Amounts invested in the company by shareholders Income Statement (recorded in two methods) Answer Accrual Principal = Revenue must be recorded the moment the has delivered the goods or services to the customer. The earning process (the moment you sell, you've completed the earning process) is complete and thus must record. The moment company incurs an expense, they must record it in the income state. Matching Principal = All expenses necessa