Bookkeeping 06

Question 1

1. When EXPENSES are subtracted from REVENUE, the SUM REMAINING is:

Answer 1

NET INCOME.
This is what is left after ALL EXPENSES have been met. It is called “The Bottom Line” because that is where it appears on the accounting page.
R-E= NI
REVENUES-EXPENSES= NET INCOME

Question 2

2. Revenue, Expenses, and Net Income are summarized on a statement called:

Answer 2

OPERATING STATEMENT

Question 3

3. What are some other terms for OPERATING STATEMENT?

Answer 3

a. Income Statement
b. Statement of Income and Expense
c. Profit and Loss Statement

Question 4

4. What is the format for the OPERATING STATEMENT?

Answer 4

REVENUES
SALES REV…..200K
SERV. REV…….100K
TOTAL REV…….,,300K

EXPENSES
WAGES……….,,,90K
RENT…………….100K
TOTAL EXP………190K

NET INCOME…………….110K

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