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When revenue totals more than expenses, net income is the result; when expenses total more than revenue, there is a net loss. • Owner's equity can be subdivided into four elements: capital, withdrawals, revenue, and expenses. Withdrawals and expenses will decrease owner's equity. Preparing an income statement, a statement Of owner's equity, and a balance sheet. The income statement is a statement written for a specific period of time that lists earned revenue and expenses incurred to produce the earned revenue.
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