Question

The income statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credits are $77,520. what does this information mean to the accountant?

Answer 1

That information means the accounts are out of balance. It happened because there is probably an error that has been made previously. This happens because if $55,800 is subtracted by $77,520 it will result in an imbalance and create a loss.

An income statement is a financial document that must be owned by a company after the balance sheet and cash flow. From the report, you can see how much income and expenses are borne by the company in a certain period of time. In addition, the income statement also has several benefits as below:

Informing the total tax to be paidProvide profit or loss informationCompany evaluation referenceSee company efficiencyBe the basis for making a decision

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