1.2 Income statement (st of earnings & comprehensive income) Flashcards
what are the 2 types of income statements
single step and multiple step income statement
what is the formula for total revenues <2> in a single step income statement
net sales + other revenues and gains
what is the formula for total expense <3> in a single step income statement
COGS + operating expense + other expense and losses
single step income statement
total revenues
- total expenses
————————-
income from continuing operations (gross)
- income tax expense (current + deferred)
—————————————-
income from continuing ops (net of tax)
(+/-) discontinued ops (net of tax)
——————————
net income or earnings
(+/-) other comprehensive income
————————————-
comprehensive income
multiple step income statement
net sales
- cogs
————–
gross margin
- op exp
—————-
operating income
+ other revenues and gains
- other expenses and losses
————————————
income from continuing ops before tax (gross)
- income tax expense (current + deferred)
——————–
income from continuing ops (net of tax)
+/- discontinued ops
———————————-
net income
+/- other comprehensive income
———————–
comprehensive income
what is top line of an i/s
sales
what is bottom line of an i/s
net profit/net income / net earnings
net sales =
net sales = gross sales - sales discount - sales returns/allowances
cost of goods purchased =
cost of goods purchased = net purchases + freight inwards
cogs =
op stock
+ cost of goods purchased
+ direct manufacturing cost (factory oh, dep on plant)
———————————-
cogas
- cl stock
——————
cogs
what expense is freight outwards
selling expense
what expense is freight inwards
purchase expense
What is impairment loss and
how to treat impairment losses
When fair market value of a company’s financial assets falls below its book value.
as part of operating expense for SEC registrants
treated as other expenses and losses for non SEC registrants
what is current income tax expense
tax as per tax books
formula: current taxable income X current tax rate
what is deferred tax expense
difference between tax books and gaap books
formula: temporary differences X enacted tax rate
