Preparation and Interpretation of Financial Statements

A list of financial statement items follows.

Wages expense Equipment

Equipment rental expense Net income

Land

Owner's capital Revenues

Accounts receivable

Required:

Accounts payable Rent expense Withdrawals Fees earned

Cash Supplies
Utilities expense

1. Indicate whether each item is found on the income statement (IS), statement of owner's equity (OE), and/or balance sheet (BS).

2. Business Application- Which statement is most closely associated with the goal of profitability?