Expenses also decrease owner's equity. If revenues are larger than expenses, the business has a net income. If revenues are smaller than expenses, the business has a net loss. Fiscal Year-Any accounting period for twelve consecutive months for which business records are kept. Withdrawals or Drawing-Amounts taken from the business by the owner for personal use.
Withdrawals reduce assets and reduce owner's equity.
Sometimes called the profit and loss statement or operating statement. Reports the profitability of a business for a specific period of time. Statement of Owner's Equity-Reports the activities in the owner's equity for a specific time period. Investments and profits increase capital. Withdrawals and losses decrease capital.