CH 2 - The Financial Statements Flashcards
Reports a company’s profit (or loss) during a particular period
Income statement
______ = revenues and gains - expenses and losses
Profit
(-Layout-)
-Company Name
-Statement name
-Period of time (fiscal, etc)
-Sales, revenue, net
-COGS
-Gross
-Selling, general & admin expenses
-Operating Income
-Other Income (Expenses)
-Pretax income
-Income tax expense
-Net income
Income statement layout
Amount of resources resulting from providing goods or services to customers.
-Main source of _______: sales or service _______
-Reported in the period that the goods & services are provided to customers for the amount a company is entitled to receive.
Revenues
Costs of providing goods and services.
-Incurred to generate revenue and run the business.
*EX: COGS; COS; Selling, general, & admin expense; interest expense; tax expense
-Reported in the period resources are used in operations.
*timing of ________ should align with timing of related revenues
Expenses
Increases and decreases in income from transactions not classified as revenues or expenses
-EX: selling investments or property, plant, and equipment for an amount that differs from their recorded amount
-Affects a company’s financial position, but outside the company’s normal operations
Gains and Losses
(Gains & Losses) If selling price > book value -> ____
gain
(Gains & Losses) If selling price < book value -> ____
Loss
Increases in income from peripheral or incidental transactions of an entity are referred to as:
a. Gains
b. Losses
c. Revenues
d. Assets
A.
(Measures of Income) =Sales revenue - COGS
Gross profit
(Measures of Income) =Gross profit - additional operating expenses
Operating Income
(Measures of Income) = operating + nonoperating income
Pretax Income
(Measures of Income) All Revenue and Gains - All Expenses and Loss
Net income
(Account | appear under operating section of income statement)
COGS
Yes
