C1 Seeing the Big Picture of Financial Accounting

Question 1

what are the 4 basic income statement components

Answer 1

1. Revenue
2. Expense
3. Gains
4. Losses

Question 2

Renenue

Answer 2

gross reciepts earned by the company selling its goods or services

Question 3

Expenses

Answer 3

the cost to the company to earn the revenue (selling goods and services)

Question 4

Gains

Answer 4

income from non-operating-related transactions, such as selling company assets

Question 5

Losses

Answer 5

the flip side of gains, is a decrease in net income that is outside the normal operations of the business such as; sale of an asset for less than its carrying amount, the write-down of assets, or a loss from lawsuits.

Question 6

the 3 basic components of a balance sheet

Answer 6

1. Assets
2. Liabilities
3. Equity

Question 7

Assets

Answer 7

resources owned by a company and which have future economic value that can be measured and can be expressed in dollars such as cash, equipment, and buildings

Question 8

Liabilities

Answer 8

a company’s legal financial debts or obligations that arise during the course of business operations incurs for operating and expansion purposes

Question 9

Equity

Answer 9

the amount of ownership left in the business after deducting total liabilities from the total assets

Question 10

the balance sheet shows results for what time frame?

Answer 10

from the date the company opened to the date on the balance sheet

Question 11

the income statement and the cashflow statement are the same in the fact that they reflect the balances when?

Answer 11

only in that 12 month reporting period, not before

Question 12

CPAs are required to abide by the AICPA code of conduct and the…?

Answer 12

their state’s code of conduct