15 The basic tool of accounting is the accounting equation

The basic tool of accounting is the accounting equation. It measures the resources of a business (what the business owns or has control of) and the claims to those resources (what the business owes to creditors and to the stockholders). The accounting equation is made up of three parts— assets, liabilities, and equity— and shows how these three parts are related. Assets appear on the left side of the equation, and the liabilities and equity appear on the right side. Assets =Liabilities +Equity Part 2 In this problem we are given the trial balance forSusanSmith,RegisteredDietician. The trial balance summarizes the ledger by listing all the accounts with their balances— assets first, followed by liabilities, and then equity. In a manual accounting system, the trial balance provides an accuracy check by showing whether total debits equal total credits. In all types of systems, the trial balance is a useful summary of the accounts and their balances because it shows the balances on a specific date for all accounts in a company's accounting system. In addition to proving the equality of debits and credits, the trial balance is also used to prepare the financial statements. The account balances are taken directly from the trial balance and are used to prepare the income statement, statement of retained earnings, and balance sheet. Part 3 Requirement 1.Prepare the income statement for the month ended July31,2024. It's important to remember that the only two types of accounts that are reported on the income statement are revenues and expenses. Every income statement contains similar information. •The revenue accounts are always listed first and then subtotaled if necessary. (Subtotals are not necessary when only on account exists.) •Each expense account is listed separately, typically from largest to smallest, and then subtotaled if necessary. (Subtotals necessary when only one expense account exists.) • Net income is calculated as total revenues minus total expenses. Part 4Refer to theJuly31,2024 trial balance provided and select the accounts and labels that will appear on the income statement of SusanSmith,RegisteredDietician. Susan Smith, Registered Dietician Income Statement Month Ended July 31, 2024 Revenues: Service Revenue Expenses: Salaries Expense Rent Expense Utilities Expense Total Expenses Net Income