Target: explain the relationship among revenue, expenses, profit and equity, and distinguish revenue from broader income. Prepare: Case B, flow-to-position aid.
- Launch · 2 min. Ask whether B's $600 profit is a loan owed to the owner. It is not a liability in this model.
- Model · 4 min. B starts at equity $2,000. With no drawings/contributions and $600 profit, equity closes at $2,600. Revenue from ordinary tutoring activity is income; income as a broad accounting category can also include gains. Do not claim every income item is tutoring revenue.
- Guided reading · 5 min. Trace
revenue $1,200 − expenses $600 → profit $600 → equity +$600. Ask what would change if the owner drew cash; the no-drawings assumption is essential. Distinguish net cash from operations $250. - Practice route · 7 min. Select Day 7 route. Explain the chain in three linked sentences and label one unsupported leap if the assumption is removed.
- Audit · 4 min. Repair “income always equals sales revenue” and “profit always equals cash increase.” State the narrower B case.
- Exit · 3 min. “What else besides profit would a full equity movement need?” Expected: contributions, drawings/distributions and other relevant changes; B assumes none.