BS, IS, Comprehensive income F1M1 Flashcards
Describe the multi step income statement
Reports operating revenues and expenses separately from non-operating revenues, expenses, and other gains and losses.
What is the benefit of the multi-step income statement?
It enhances user information because the line items provide readily available data that can be used to calculate analytical ratios
Selling Expenses (IS) include:
Freight out
Salaries for salespeople
Commissions
Advertising
General Administrative expenses (IS) include:
- Officers salaries
- Insurance
- 5.
Nonoperating revenues & Gains (IS) include:
- Auxiliary activities
2.
3.
4.
5.
Describe the Single-Step Income Statement
Presents income by subtracting continuing operations and total expenses (including income tax expense) from Total Revenues
What’s a benefit of using a single step income statement
Simple design
Revenues and expenses are presented with the same level/degree of importance
Discontinued operations are reported _______ from continuing operations.
SEPARATELY from continuing operations
Discontinued operations are reported…
NET OF TAX
Amounts to be included in Discontinued operations should be reported _______ (hint: timing)
In the period in which they occur
3 examples of strategic shift ????
????
Define exchange rate
The price of one unit of currency expressed in units of another currency
The rate that two currencies will be exchange ag equal value
Direct method of foreign currency exchange
The domestic price of one currency to one unit of another currency.
If speaking in terms of the direct method I would say $1 dollar is equal to 1 yen
Indirect Method (to express the foreign currency exchange rate)
The foreign price of one unit of the domestic currency
.68 euros buys $1
Current exchange rate
The exchange rate at the current date aka the Spot Rate
