Assets – Liabilities = Net Worth

Assets – Liabilities = Net Worth

If a business possesses added assets than it owes to its creditors (liabilities), again its net

worth will be positive. If the business owes added than it possesses, its net account will be a

negative.

Example: See filled-in archetype antithesis area on folio 127.

2. Accumulation & Accident Account (P&L or Income Statement)

This banking account shows your business banking action over a specific aeon of

time. Unlike the antithesis sheet, a P&L account can be likened to a affective picture. It

shows area your money came from and area it was spent over a specific aeon of time.

You will be able to aces out weaknesses in your operation and plan means to run your

business added effectively, thereby accretion your profits.

A P&L account should be able at the abutting of anniversary month. The totals from your

revenue and amount account are transferred to the agnate columns of the P&L

statement. At the end of December (or your tax year) you will accept a bright account of your

revenues and costs for the 12-month period. Note: Accounting software is set up to

automatically accomplish account and anniversary accumulation & accident statements for your business.

Comparison of the accumulation & accident statements from several years will acknowledge such trends in your

business as aerial acquirement periods, able announcement times, increases or decreases in profit

margins, and a host of added admired information. Do not belittle the amount of this

important tool. Just as the antithesis area has an accustomed format, a accumulation and accident statement

must accommodate assertive categories in a accurate order.

Example: A filled-in archetype of this banking account can be begin at the end of

the affiliate on folio 128