Managerial Accounting

Test Syllabus |

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* General Financial Statements * Accounting Cycle * Ratio Comparison * Accounting Transactions * Accounting Institutions * Financial Ratio Formulas * Ratio Selection |

The income statement is the one of the three major financial statements. The other two are the balance sheet and the statement of cash flows. The income statement  is divided into two parts: the operating and non-operating sections.

Definition of 'Accounting Cycle'The name given to the collective process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements. The nine steps of the accounting cycle are:  1. Collecting and analyzing data from transactions and events. 2. Putting transactions into the general journal. 3. Posting entries to the general ledger. 4. Preparing an unadjusted trial balance. 5. Adjusting entries appropriately. 6. Preparing an adjusted trial balance. 7. Organizing the accounts into the financial statements. 8. Closing the books. 9. Preparing a post-closing trial balance to check th |

General Financial Statements

Investopedia explains 'Income Statement'The income statement is the one of the three major financial statements. The other two are the balance sheet and the statement of cash flows. The income statement  is divided into two parts: the operating and non-operating sections.

The portion of the income statement that deals with operating items is interesting to investors and analysts alike because this section discloses information about revenues and expenses that are a direct result of the regular business operations. For example, if a business creates sports equipment, then the operating items section would talk about the revenues and expenses involved with the production of sports equipment.

The non-operating items section discloses revenue and expense information about activities that are...