1ST QUARTER

Question 1

what are the 5 financial statements

Answer 1

income statement
statement of owner’s equity
balance sheet
statement of cash flows
notes to the financial statements

Question 2

income statement is aka

Answer 2

statement of comprehensive income
statement of profit and loss

Question 3

purpose of income statement

Answer 3

to show results of operations of a company (whether it had losses or gains at the end)

Question 4

liabilites are…

Answer 4

economic obligations

Question 5

assets are our….

Answer 5

economic resources

Question 6

statement of owner’s equity is aka

Answer 6

changes in owner’s equity

Question 7

purpose of owner’s equity

Answer 7

to show ale (assets = liabilities + equity)
to show company’s financial health and stability or actual value

Question 8

balance sheet is aka

Answer 8

statement of financial position

Question 9

purpose of balance sheet

Answer 9

to show the position of the company as of a specific period

Question 10

all accounts seen in the income statement are what

Answer 10

temporary or nominal accounts

Question 11

highly simplified as all revenues are simply added less all expenses with a net profit or loss at the end

Answer 11

single step income statement

Question 12

single step is used for

Answer 12

service industry income statement

Question 13

multi-step income statement is used for

Answer 13

merchandising ang manufacturing industry

Question 14

considers costs of goods and gross profit

Answer 14

multi-step income statement

Question 15

formula of net sales

Answer 15

gross sales minus sales discounts and sales returns

Question 16

formula of net purchases

Answer 16

gross purchases plus freight in minus purchase discounts and purchase returns

Question 17

formula of cost of goods available for sale

Answer 17

beginning inventory plus net purchases

Question 18

formula of cost of goods sold aka cost of sales

Answer 18

cost of goods available for sale minus ending inventory

Question 19

formula of gross profit

Answer 19

net sales minus cost of goods sold

Question 20

once you have your -, that’s the only time you deduct all other expenses to come up with your net Income or loss

Answer 20

gross profit