Doug Kurtz has just completed the income statement for his first month in business as the owner of a new athletic club called get in shape! he had studied accounting in high school, so he felt confident enough to prepare his own income statement, summarized below

• revenue 25 000
• less: All expenses 8 000
• net income 17 000

the revenue figure includes 60 membership at 300 each, which are good for one year. Most of these were sold on the first day of business. Doug is ecstatic with the high level of profits he has earned-but one of the club's members, a local accountant, has cautioned Doug to use all accounting principles properly, or serious errors could result.