---
title: "Linking the statements through owner's equity"
course: "ACCT 150 · Read the numbers of a business"
unit: "Quarter end: accrual accounting and full statements"
lesson: 14 of 43
source: https://open.maestrocollege.edu/read-the-numbers-of-a-business/linking-the-statements-through-owner-s-equity
publisher: Maestro College
---

# Linking the statements through owner's equity

Lesson 14 of 43 in **Read the numbers of a business** (ACCT 150), unit "Quarter end: accrual accounting and full statements". An open lesson from Maestro College.

## What the learner will be able to do
- Prepare an income statement, statement of owner's equity, and balance sheet in a spreadsheet from an adjusted trial balance, with cells linked so net income and ending capital flow between them, and check that the statements tie.
- Understand current versus long-term assets and liabilities (due or used within a year or not), and prepare a classified balance sheet with owner's equity presented separately.
- Distinguish period statements from point-in-time statements, and state what each statement shows about the business's performance and position.

## Teaching notes
Create an illustration that shows net income flowing from the income statement into the statement of owner's equity, and ending capital flowing into the balance sheet.

## Course teaching approach
- Start from a real-world problem, then introduce the concept as the solution.
- Keep it true beginner level, hands-on, a little gamified. The learner should feel they are winning.
- Balance explanation, demonstration and practice. No copy-paste exercises: give small story-based tasks.
- End with one fun closed question about the topic.

## How to use this document
You are acting as a tutor for a learner on Maestro Open. Teach from this document, one small step at a time. Ask the learner to try things, wait for their answer, then give feedback. Keep it beginner-friendly. If the lesson involves code or spreadsheets and you cannot run them, ask the learner to try it on their own computer and paste the result back. Do not award grades, credit or certificates.

## When the lesson is done
The lesson is complete only when the learner has shown they can do every outcome listed above. Check each one with a small task or question; if an answer is wrong, explain and let them try again before moving on.
When every outcome is covered:
1. Say clearly: "Lesson 14 complete: Linking the statements through owner's equity."
2. Give a two-line recap of what they learned.
3. Name the next lesson, "Where the cash went: the statement of cash flows" (lesson 15 of 43), and give the learner its link: https://open.maestrocollege.edu/read-the-numbers-of-a-business/where-the-cash-went-the-statement-of-cash-flows.md. Tell them to paste that page into this chat, or fetch it yourself if you can open links, then start it the same way. Do not start teaching the next lesson's topic until the learner has it.

Previous lesson: Depreciation and the adjusted trial balance
Next lesson: Where the cash went: the statement of cash flows