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Economic- and management sciences

Grade 9

Business, consumer and financial knowledge and skills

Module 15

Difference between the income statement and balance sheet


To be able to distinguish between an income statement and a balance sheet

[LO 3.1]

Financial statements are documents which give information about finances of a business. The balance sheet and the income statements are two of these. They give a summary of the financial state of a business. It is important that financial statements are easy to set out and understand.

The information in financial statements makes it possible to plan and make good decisions for a business. All financial statements have to be drawn up according to the rules of Generally Accepted Accounting Practice.

The main purpose of the income statement is to show the profit or loss made over a particular period.

The main purpose of the balance sheet is to show the financial position of a business on a particular date. The balance sheet is divided into the following sections:

1. Assets - Non-current Assets and Current Assets.

2 . Equity and Liabilities - Ownership Interest, Non-current Liabilities and Current Liabilities.

  • In your own words, describe the difference between an income statement and a balance sheet.


To draw up income statements for a service enterprise and a commercial enterprise

[LO 3.1]

  • The following examples are Income Statements of a service enterprise and a commercial enterprise:

Z. ZulekiTrading as XYZ Plumbers Income Statement for the year ended 31 December 2003

Current Income 55 000
Operating Expenditure (38 274)
Telephone 3 420
Water and Electricity 5 620
Rental 12 000
Fuel 3 730
Stationery 3 680
Wages 9 824
Net Income for the year 16 726

S. SolaniTrading as Solani Dealers Income Statement for the year ended 31 December 2003

Sales 324 000
Selling costs (200 000)
Gross Profit 124 000
Other current income 14 400
Rental income 12 000
Interest income 2 400
Gross Current Income 138 400
Operating expenditure (32 800)
Salaries and Wages 23 000
Stationery 800
Insurance 2 400
Telephone 500
Advertising costs 600
Interest on bond 2 500
Rates and taxes 3 000
Net Profit for the year 105 600

ASSIGNMENT 1 : Income Statement of a Service Enterprise

  • The accounting period of Fixit Plumbers (owner F. Fix) ends on 30 June every year. The trial balance below appears in their books on 30 June 2003. Use the information to draw up the Income Statement for the year ended 30 June 2003. (Paper will be provided.)


Dt. Cr.
Balance Sheet section
Capital B1 138 629
Withdrawals B2 15 800
Land and Buildings B3 100 000
Vehicles B4 28 000
Equipment B5 12 740
Bank B6 3 963
Nominal Accounts section
Cost of materials N1 6 084
Insurance N2 531
Advertisements N3 389
Salaries N4 12 500
Wages N5 4 715
Current Income N6 52 871
Fuel N7 3 186
Repairs N8 917
Telephone N9 1 008
Stationery N10 492
Water and Electricity N11 1 175
191 500 191 500

ASSIGNMENT 2 : Income Statement of a Commercial Enterprise

  • Use the information below to complete the Income Statement of Hendrikse Dealers (Owner: H. Hendrikse) for the year ended 30 June 2003. (Paper will be provided.)

Questions & Answers

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s. Reply
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Devang Reply
are you nano engineer ?
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Abhijith Reply
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s. Reply
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s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
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Sanket Reply
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Damian Reply
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abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
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I'm interested in nanotube
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Ramkumar Reply
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Sravani Reply
what is system testing?
preparation of nanomaterial
Victor Reply
Yes, Nanotechnology has a very fast field of applications and their is always something new to do with it...
Himanshu Reply
good afternoon madam
what is system testing
what is the application of nanotechnology?
In this morden time nanotechnology used in many field . 1-Electronics-manufacturad IC ,RAM,MRAM,solar panel etc 2-Helth and Medical-Nanomedicine,Drug Dilivery for cancer treatment etc 3- Atomobile -MEMS, Coating on car etc. and may other field for details you can check at Google
anybody can imagine what will be happen after 100 years from now in nano tech world
after 100 year this will be not nanotechnology maybe this technology name will be change . maybe aftet 100 year . we work on electron lable practically about its properties and behaviour by the different instruments
name doesn't matter , whatever it will be change... I'm taking about effect on circumstances of the microscopic world
how hard could it be to apply nanotechnology against viral infections such HIV or Ebola?
silver nanoparticles could handle the job?
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I'm interested in Nanotube
this technology will not going on for the long time , so I'm thinking about femtotechnology 10^-15
can nanotechnology change the direction of the face of the world
Prasenjit Reply
At high concentrations (>0.01 M), the relation between absorptivity coefficient and absorbance is no longer linear. This is due to the electrostatic interactions between the quantum dots in close proximity. If the concentration of the solution is high, another effect that is seen is the scattering of light from the large number of quantum dots. This assumption only works at low concentrations of the analyte. Presence of stray light.
Ali Reply
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic and management sciences grade 9. OpenStax CNX. Sep 15, 2009 Download for free at http://cnx.org/content/col11074/1.1
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