Project 1

Training Room 3: Analyzing Temporary Capital Accounts

Training Room 3 Introduction

Suggested Time: 160 minutes

Click on the picture below to see what happens after one week of operation.

Revenue is coming in now that there are sales. At the same time, expenses increase—the owner now has to pay expenses such as employees’ wages, rent, utilities, and supplies.

If the business is successful, revenue will be greater than expenses and the balance (water level) will be higher than before business operations began; therefore, the business will have a profit. If expenses are greater than revenue, the balance (water level) will be lower than it was before business operations began; therefore, the business may have to adjust expenses, or even close operations.