Ch. 4 (IFSA) Understanding Income Statements Flashcards by Tom Sharrock

___ communicates how much revenue the company generated during a period and what costs it incurred in connection with generating that revenue.

The income statement

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The income statement communicates ___.

how much revenue the company generated during a period and what costs it incurred in connection with generating that revenue

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___ is also called the statement of operations or statement of earnings or, sometimes, in business jargon, it is called the P&L (for profit and loss).

The income statement

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The income statement is also called ___ or statement of earnings or, sometimes, in business jargon, it is called the P&L (for profit and loss).

the statement of operations

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The income statement is also called the statement of operations or ___ or, sometimes, in business jargon, it is called the P&L (for profit and loss).

statement of earnings

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The income statement is also called the statement of operations or statement of earnings or, sometimes, in business jargon, it is called ___.

the P&L (for profit and loss)

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___ also includes gains and losses, which are asset inflows and outflows, respectively, not directly related to the ordinary activities of the business.

Net income

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Net income also includes ___, which are asset inflows and outflows, respectively, not directly related to the ordinary activities of the business.

gains and losses

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Net income also includes gains and losses, which are ___.

asset inflows and outflows, respectively, not directly related to the ordinary activities of the business

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If a company sells surplus land that is not needed, ___ and the net result is reported as a gain or a loss.

the cost of the land is subtracted from the sales price

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If a company sells surplus land that is not needed, the cost of the land is subtracted from the sales price and ____.

the net result is reported as a gain or a loss

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Grouping together expenses such as depreciation on manufacturing equipment and depreciation on administrative facilities into a single line item called depreciation on the income statement represents ___ of the expense.

a grouping by nature

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An example of ___ on the income statement would be grouping together expenses into a category such as cost of goods sold, which would include some salaries (e.g., salespeople’s), material costs, depreciation, and other direct sales-related expenses.

grouping by function

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___ is the amount of revenue available after subtracting the costs of delivering goods or services such as material and labor.

Gross profit

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Gross profit is ___.

the amount of revenue available after subtracting the costs of delivering goods or services such as material and labor

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___ further deducts operating expenses such as selling, general, administrative, and research and development expenses.

Operating profit

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Operating profit further deducts operating expenses such as ___.

selling, general, administrative, and research and development expenses

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___ reflects a company’s profits on its usual business activities before deducting taxes.

Operating profit

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Operating profit reflects ___.

a company’s profits on its usual business activities before deducting taxes

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___ are similar to revenue; however, they arise from secondary or peripheral activities rather than from a company’s primary business activities.

Gains

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Gains are similar to revenue; however, they arise from ___.

secondary or peripheral activities rather than from a company’s primary business activities

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For a restaurant, the sale of surplus restaurant equipment for more than its cost is referred to as a ___ rather than as revenue.

gain

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An important concept concerning ___ recognition is that it can occur independently of cash movements.

revenue

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An important concept concerning revenue recognition is that it can occur independently of ___ movements.

cash

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A fundamental principle of ___ is that revenue is recognized when it is earned, so the company’s financial records reflect the sale when it is made and a related accounts receivable is created.

accrual accounting

A fundamental principle of accrual accounting is that ___, so the company’s financial records reflect the sale when it is made and a related accounts receivable is created.

revenue is recognized when it is earned

A fundamental principle of accrual accounting is that revenue is recognized when it is earned, so the company’s financial records ___ and a related accounts receivable is created.

reflect the sale when it is made

A fundamental principle of accrual accounting is that revenue is recognized when it is earned, so the company’s financial records reflect the sale when it is made and ___.

a related accounts receivable is created

Under ___, in each accounting period, the company estimates what percentage of the contract is complete and then reports that percentage of the total contract revenue in its income statement.

the percentage-of-completion method

Under the percentage-of-completion method, in each accounting period, the company ___.

estimates what percentage of the contract is complete and then reports that percentage of the total contract revenue in its income statement

Under the ___, the company does not report any revenue until the contract is finished.

completed contract method

Under the completed contract method, the company ___.

does not report any revenue until the contract is finished

Under ___, the portion of the total profit of the sale that is recognized in each period is determined by the percentage of the total sales price for which the seller has received cash.

the installment method

Under the installment method, the portion of the total profit of the sale that is recognized in each period is determined by ___.

the percentage of the total sales price for which the seller has received cash

Under ___, the seller does not report any profit until the cash amounts paid by the buyer—including principal and interest on any financing from the seller—are greater than all the seller’s costs of the property.

the cost recovery method

Under the cost recovery method, the seller does not report any profit until ___.

the cash amounts paid by the buyer—including principal and interest on any financing from the seller—are greater than all the seller’s costs of the property

A general principle of ___ is the matching principle, also known as the “matching of costs with revenues.”

expense recognition

A general principle of expense recognition is ___.

the matching principle, also known as the “matching of costs with revenues”

Under ___, a company directly matches some expenses (e.g., cost of goods sold) with associated revenues

the matching principle

Under the matching principle, a company directly matches ___

some expenses (e.g., cost of goods sold) with associated revenues

___, expenditures that less directly match the timing of revenues, are reflected in the period when a company makes the expenditure or incurs the liability to pay.

Period costs

Period costs, ___, are reflected in the period when a company makes the expenditure or incurs the liability to pay.

expenditures that less directly match the timing of revenues

Period costs, expenditures that less directly match the timing of revenues, are reflected in the period when ___.

a company makes the expenditure or incurs the liability to pay

Under ___, at the time revenue is recognized on a sale, a company is required to record an estimate of how much of the revenue will ultimately be uncollectible.

the matching principle

Under the matching principle, at the time ___, a company is required to record an estimate of how much of the revenue will ultimately be uncollectible.

revenue is recognized on a sale

Under the matching principle, at the time revenue is recognized on a sale, a company is required to ___.

record an estimate of how much of the revenue will ultimately be uncollectible

The company records its estimate of uncollectible amounts as ___, not as a direct reduction of revenues.

an expense on the income statement

Under the matching principle, a company is required to ___, to recognize an estimated warranty expense in the period of the sale, and to update the expense as indicated by experience over the life of the warranty.

estimate the amount of future expenses resulting from its warranties

Under the matching principle, a company is required to estimate the amount of future expenses resulting from its warranties, to ___, and to update the expense as indicated by experience over the life of the warranty.

recognize an estimated warranty expense in the period of the sale

Under the matching principle, a company is required to estimate the amount of future expenses resulting from its warranties, to recognize an estimated warranty expense in the period of the sale, and to ___.

update the expense as indicated by experience over the life of the warranty

The two main types of long-lived assets whose costs are not allocated over time are ___ and those intangible assets with indefinite useful lives.

land

The two main types of long-lived assets whose costs are not allocated over time are land and ___.

those intangible assets with indefinite useful lives

The two main types of long-lived assets whose costs are ___ are land and those intangible assets with indefinite useful lives.

not allocated over time

___ is the process of systematically allocating costs of long-lived assets over the period during which the assets are expected to provide economic benefits.

Depreciation

Depreciation is ___ during which the assets are expected to provide economic benefits.

the process of systematically allocating costs of long-lived assets over the period

Depreciation is the process of systematically allocating costs of long-lived assets over the period during which ___.

the assets are expected to provide economic benefits

___ is the term commonly applied to the process of systematically allocating costs for intangible long-lived assets with a finite useful life.

Amortization

Amortization is the term commonly applied to the process of systematically allocating costs for ___ with a finite useful life.

intangible long-lived assets

Amortization is the term commonly applied to the process of systematically allocating costs for intangible long-lived assets with ___.

a finite useful life

___ allocates evenly the cost of long-lived assets less estimated residual value over the estimated useful life of an asset.

The straight-line method

The straight-line method ___ less estimated residual value over the estimated useful life of an asset.

allocates evenly the cost of long-lived assets

The straight-line method allocates evenly the cost of long-lived assets ___ over the estimated useful life of an asset.

less estimated residual value

The straight-line method allocates evenly the cost of long-lived assets less estimated residual value ___.

over the estimated useful life of an asset

Calculating ___ requires two significant estimates: the estimated useful life of an asset and the estimated residual value (also known as salvage value) of an asset.

depreciation and amortization

Calculating depreciation and amortization requires two significant estimates: ___ and the estimated residual value (also known as salvage value) of an asset.

the estimated useful life of an asset

Calculating depreciation and amortization requires two significant estimates: the estimated useful life of an asset and ___.

the estimated residual value (also known as salvage value) of an asset

Generally, alternatives to the straight-line method of depreciation are called ___ because ___.

accelerated methods of depreciation / they accelerate (i.e., speed up) the timing of depreciation

___ allocate a greater proportion of the cost to the early years of an asset’s useful life

Accelerated depreciation methods

Accelerated depreciation methods allocate ___

a greater proportion of the cost to the early years of an asset’s useful life.

A company’s estimates for doubtful accounts and/or for warranty expenses can affect its reported ___.

net income

A company’s choice of depreciation or amortization method, estimates of assets’ useful lives, and estimates of assets’ residual values can affect reported ___.

net income

A policy that results in recognition of ___ is considered less conservative.

expenses later rather than sooner

To assess a company’s ___, it is helpful to separate those prior years’ items of income and expense that are likely to continue in the future from those items that are less likely to continue.

future earnings

To assess a company’s future earnings, it is helpful to separate those prior years’ items of ___ that are likely to continue in the future from those items that are less likely to continue.

income and expense

To assess a company’s future earnings, it is helpful to separate those prior years’ items of income and expense that are ___.

likely to continue in the future from those items that are less likely to continue

Some items from prior years are clearly not expected to continue in the future periods and are separately disclosed on a company’s ___. - discontinued operations - extraordinary items (no longer permitted under IFRS)

income statement

Some items from prior years are clearly not expected to continue in the future periods and are separately disclosed on a company’s income statement. - ___ - extraordinary items (no longer permitted under IFRS)

discontinued operations

Some items from prior years are clearly not expected to continue in the future periods and are separately disclosed on a company’s income statement. - discontinued operations - ___

extraordinary items (no longer permitted under IFRS)

The terms ___, common stock, and common shares are used equivalently.

ordinary shares

The terms ordinary shares, ___, and common shares are used equivalently.

common stock

The terms ordinary shares, common stock, and ___ are used equivalently.

common shares

When a company has any securities that are potentially convertible into common stock, it is said to have ___.

a complex capital structure

When a company ___, it is said to have a complex capital structure.

has any securities that are potentially convertible into common stock

Specific examples of ___ include convertible bonds, convertible preferred stock, employee stock options, and warrants.

securities that are potentially convertible into common stock

Specific examples of securities that are potentially convertible into common stock include ___, convertible preferred stock, employee stock options, and warrants.

convertible bonds

Specific examples of securities that are potentially convertible into common stock include convertible bonds, ___, employee stock options, and warrants.

convertible preferred stock

Specific examples of securities that are potentially convertible into common stock include convertible bonds, convertible preferred stock, ___, and warrants.

employee stock options

Specific examples of securities that are potentially convertible into common stock include convertible bonds, convertible preferred stock, employee stock options, and ___.

warrants

If a company’s capital structure does not include securities that are potentially convertible into common stock, it is said to have ___.

a simple capital structure

If a company’s capital structure ___, it is said to have a simple capital structure.

does not include securities that are potentially convertible into common stock

The distinction between___ is relevant to the calculation of EPS because any securities that are potentially convertible into common stock could, as a result of conversion, potentially dilute (i.e., decrease) EPS.

simple versus complex capital structure

The distinction between simple versus complex capital structure is relevant to ___ because any securities that are potentially convertible into common stock could, as a result of conversion, potentially dilute (i.e., decrease) EPS.

the calculation of EPS

The distinction between simple versus complex capital structure is relevant to the calculation of EPS because ___.

any securities that are potentially convertible into common stock could, as a result of conversion, potentially dilute (i.e., decrease) EPS

Accounting standards require companies to disclose what their EPS would be if all ___ were converted into common stock.

dilutive securities

Accounting standards require companies to disclose what their EPS would be if all dilutive securities were ___.

converted into common stock

___ is the amount of income available to common shareholders divided by the weighted average number of common shares outstanding over a period.

Basic EPS

Basic EPS is ___ divided by the weighted average number of common shares outstanding over a period.

the amount of income available to common shareholders

Basic EPS is the amount of income available to common shareholders divided by ___.

the weighted average number of common shares outstanding over a period

___ is the amount of net income remaining after preferred dividends (if any) have been paid.

The amount of income available to common shareholders

The amount of income available to common shareholders is ___.

the amount of net income remaining after preferred dividends (if any) have been paid

___ = (Net income – Preferred dividends) ÷ Weighted average number of shares outstanding

Basic EPS

Basic EPS = (___ – Preferred dividends) ÷ Weighted average number of shares outstanding

Net income

Basic EPS = (Net income – ___) ÷ Weighted average number of shares outstanding

Preferred dividends

Basic EPS = (Net income – Preferred dividends) ÷ ___

Weighted average number of shares outstanding

If a company has ___, then its basic EPS is equal to its diluted EPS.

a simple capital structure (i.e., one with no potentially dilutive securities)

If a company has a simple capital structure (i.e., one with no potentially dilutive securities), then its ___ is equal to its diluted EPS.

basic EPS

If a company has a simple capital structure (i.e., one with no potentially dilutive securities), then its basic EPS is equal to its ___.

diluted EPS

If a company has ___, its diluted EPS is lower than its basic EPS.

dilutive securities

If a company has dilutive securities, its diluted EPS is ___ its basic EPS.

lower than

When a company has ___, diluted EPS is calculated using the if-converted method (i.e., what EPS would have been if the convertible preferred securities had been converted at the beginning of the period).

convertible preferred stock outstanding

When a company has convertible preferred stock outstanding, diluted EPS is calculated using ___ (i.e., what EPS would have been if the convertible preferred securities had been converted at the beginning of the period).

the if-converted method

When a company has convertible preferred stock outstanding, diluted EPS is calculated using the if-converted method (___).

i.e., what EPS would have been if the convertible preferred securities had been converted at the beginning of the period

___ using the if-converted method for convertible preferred stock is equal to the amount of net income divided by the weighted average number of shares outstanding plus the new shares of common stock that would be issued upon conversion of the preferred.

The diluted EPS

The diluted EPS using the ___ for convertible preferred stock is equal to the amount of net income divided by the weighted average number of shares outstanding plus the new shares of common stock that would be issued upon conversion of the preferred.

if-converted method

The diluted EPS using the if-converted method for ___ is equal to the amount of net income divided by the weighted average number of shares outstanding plus the new shares of common stock that would be issued upon conversion of the preferred.

convertible preferred stock

The diluted EPS using the if-converted method for convertible preferred stock is equal to ___ divided by the weighted average number of shares outstanding plus the new shares of common stock that would be issued upon conversion of the preferred.

the amount of net income

The diluted EPS using the if-converted method for convertible preferred stock is equal to the amount of net income divided by ___ plus the new shares of common stock that would be issued upon conversion of the preferred.

the weighted average number of shares outstanding

The diluted EPS using the if-converted method for convertible preferred stock is equal to the amount of net income divided by the weighted average number of shares outstanding plus ___.

the new shares of common stock that would be issued upon conversion of the preferred

The formula to calculate diluted EPS using the if-converted method for ___ is: Diluted EPS = (Net income)/(Weighted average number of shares outstanding + New common shares that would have been issued at conversion)

preferred stock

The formula to calculate diluted EPS using the if-converted method for preferred stock is: Diluted EPS = (___)/(Weighted average number of shares outstanding + New common shares that would have been issued at conversion)

Net income

The formula to calculate diluted EPS using the if-converted method for preferred stock is: Diluted EPS = (Net income)/(___ + New common shares that would have been issued at conversion)

Weighted average number of shares outstanding

The formula to calculate diluted EPS using the if-converted method for preferred stock is: Diluted EPS = (Net income)/(Weighted average number of shares outstanding + ___)

New common shares that would have been issued at conversion

The formula to calculate diluted EPS using the if - converted method for ___ is: Diluted EPS = (Net income + After-tax interest on convertible debt – Preferred dividends)/(Weighted average number of shares outstanding + New common shares that could have been issued at conversion)

convertible debt

The formula to calculate diluted EPS using the if - converted method for convertible debt is: Diluted EPS = (___ + After-tax interest on convertible debt – Preferred dividends)/(Weighted average number of shares outstanding + New common shares that could have been issued at conversion)

Net income

The formula to calculate diluted EPS using the if - converted method for convertible debt is: Diluted EPS = (Net income + ___ – Preferred dividends)/(Weighted average number of shares outstanding + New common shares that could have been issued at conversion)

After-tax interest on convertible debt

The formula to calculate diluted EPS using the if - converted method for convertible debt is: Diluted EPS = (Net income + After-tax interest on convertible debt – ___)/(Weighted average number of shares outstanding + New common shares that could have been issued at conversion)

Preferred dividends

The formula to calculate diluted EPS using the if - converted method for convertible debt is: Diluted EPS = (Net income + After-tax interest on convertible debt – Preferred dividends)/(___ + New common shares that could have been issued at conversion)

Weighted average number of shares outstanding

The formula to calculate diluted EPS using the if - converted method for convertible debt is: Diluted EPS = (Net income + After-tax interest on convertible debt – Preferred dividends)/(Weighted average number of shares outstanding + ___)

New common shares that could have been issued at conversion

Under U.S. GAAP, when ___, the diluted EPS is calculated using the treasury stock method (i.e., what EPS would have been if the options had been exercised and the company had used the proceeds to repurchase common stock).

a company has stock options, warrants, or their equivalents outstanding

Under U.S. GAAP, when a company has stock options, warrants, or their equivalents outstanding, the diluted EPS is calculated using ___ (i.e., what EPS would have been if the options had been exercised and the company had used the proceeds to repurchase common stock).

the treasury stock method

Under U.S. GAAP, when a company has stock options, warrants, or their equivalents outstanding, the diluted EPS is calculated using the treasury stock method (i.e., what EPS would have been if ___).

the options had been exercised and the company had used the proceeds to repurchase common stock

The formula to calculate diluted EPS using ___ is: Diluted EPS = (Net income – Preferred dividends)/(Weighted average number of shares outstanding + New shares that could have been issued at option exercise – Shares that could have been purchased with cash received upon exercise)

the treasury stock method for options

The formula to calculate diluted EPS using the treasury stock method for options is: Diluted EPS = (___ – Preferred dividends)/(Weighted average number of shares outstanding + New shares that could have been issued at option exercise – Shares that could have been purchased with cash received upon exercise)

Net income

The formula to calculate diluted EPS using the treasury stock method for options is: Diluted EPS = (Net income – ___)/(Weighted average number of shares outstanding + New shares that could have been issued at option exercise – Shares that could have been purchased with cash received upon exercise)

Preferred dividends

The formula to calculate diluted EPS using the treasury stock method for options is: Diluted EPS = (Net income – Preferred dividends)/(___ + New shares that could have been issued at option exercise – Shares that could have been purchased with cash received upon exercise)

Weighted average number of shares outstanding

The formula to calculate diluted EPS using the treasury stock method for options is: Diluted EPS = (Net income – Preferred dividends)/(Weighted average number of shares outstanding + ___ – Shares that could have been purchased with cash received upon exercise)

New shares that could have been issued at option exercise

The formula to calculate diluted EPS using the treasury stock method for options is: Diluted EPS = (Net income – Preferred dividends)/(Weighted average number of shares outstanding + New shares that could have been issued at option exercise – ___)

Shares that could have been purchased with cash received upon exercise

Two analytical tools to ___: common-size analysis and income statement ratios.

analyze the income statement

Two analytical tools to analyze the income statement: ___ and income statement ratios.

common-size analysis

Two analytical tools to analyze the income statement: common-size analysis and ___.

income statement ratios

___ of the income statement can be performed by stating each line item on the income statement as a percentage of revenue.

Common-size analysis

Common-size analysis of the income statement can be performed by ___.

stating each line item on the income statement as a percentage of revenue

___ facilitate comparison across time periods (time-series analysis) and across companies of different sizes (cross-sectional analysis).

Common-size statements

Common-size statements facilitate ___ (time-series analysis) and across companies of different sizes (cross-sectional analysis).

comparison across time periods

Common-size statements facilitate comparison across time periods (___) and across companies of different sizes (cross-sectional analysis).

time-series analysis

Common-size statements facilitate comparison across time periods (time-series analysis) and ___ (cross-sectional analysis).

across companies of different sizes

Common-size statements facilitate comparison across time periods (time-series analysis) and across companies of different sizes (___).

cross-sectional analysis

One indicator of profitability is ___, also known as profit margin and return on sales, which is calculated as net income divided by revenue (or sales).

net profit margin

One indicator of profitability is net profit margin, also known as ___ and return on sales, which is calculated as net income divided by revenue (or sales).

profit margin

One indicator of profitability is net profit margin, also known as profit margin and ___, which is calculated as net income divided by revenue (or sales).

return on sales

One indicator of profitability is net profit margin, also known as profit margin and return on sales, which is calculated as ___ divided by revenue (or sales).

net income

One indicator of profitability is net profit margin, also known as profit margin and return on sales, which is calculated as net income divided by ___.

revenue (or sales)

___ = Net income ÷ Revenue

Net profit margin

Net profit margin = ___ ÷ Revenue

Net income

Net profit margin = Net income ÷ ___

Revenue

___ measures the amount of income that a company was able to generate for each dollar of revenue.

Net profit margin

Net profit margin measures ___ for each dollar of revenue.

the amount of income that a company was able to generate

Net profit margin measures the amount of income that a company was able to generate for ___.

each dollar of revenue

___ is calculated as revenue minus cost of goods sold, and the gross profit margin is calculated as the gross profit divided by revenue.

Gross profit

Gross profit is calculated as ___ minus cost of goods sold, and the gross profit margin is calculated as the gross profit divided by revenue.

revenue

Gross profit is calculated as revenue minus ___, and the gross profit margin is calculated as the gross profit divided by revenue.

cost of goods sold

Gross profit is calculated as revenue minus cost of goods sold, and ___ is calculated as the gross profit divided by revenue.

the gross profit margin

Gross profit is calculated as revenue minus cost of goods sold, and the gross profit margin is calculated as ___ divided by revenue.

the gross profit

Gross profit is calculated as revenue minus cost of goods sold, and the gross profit margin is calculated as the gross profit divided by ___.

revenue

___ = Gross profit ÷ Revenue

Gross profit margin

Gross profit margin = ___ ÷ Revenue

Gross profit

Gross profit margin = Gross profit ÷ ___

Revenue

___ measures the amount of gross profit that a company generated for each dollar of revenue.

The gross profit margin

The gross profit margin measures ___ for each dollar of revenue.

the amount of gross profit that a company generated

The gross profit margin measures the amount of gross profit that a company generated for ___.

each dollar of revenue

There are certain items of ___ that, by accounting convention, are excluded from the net income calculation, known as other comprehensive income.

revenue and expense

There are certain items of revenue and expense that, by accounting convention, are excluded from ___, known as other comprehensive income.

the net income calculation

There are certain items of revenue and expense that, by accounting convention, are excluded from the net income calculation, known as ___.

other comprehensive income

In U.S. financial statements, according to U.S. GAAP, four types of items are treated as ___. - Foreign currency translation adjustments. - Unrealized gains or losses on derivatives contracts accounted for as hedges. - Unrealized holding gains and losses on a certain category of investment securities, namely, available - for - sale securities. - Changes in the funded status of a company’s defined benefit postretirement plans.

other comprehensive income

In U.S. financial statements, according to U.S. GAAP, four types of items are treated as other comprehensive income. - ___. - Unrealized gains or losses on derivatives contracts accounted for as hedges. - Unrealized holding gains and losses on a certain category of investment securities, namely, available - for - sale securities. - Changes in the funded status of a company’s defined benefit postretirement plans.

Foreign currency translation adjustments In consolidating the financial statements of foreign subsidiaries, the effects of translating the subsidiaries’ balance sheet assets and liabilities at current exchange rates are included as other comprehensive income.

In U.S. financial statements, according to U.S. GAAP, four types of items are treated as other comprehensive income. - Foreign currency translation adjustments. - ___. - Unrealized holding gains and losses on a certain category of investment securities, namely, available - for - sale securities. - Changes in the funded status of a company’s defined benefit postretirement plans.

Unrealized gains or losses on derivatives contracts accounted for as hedges Changes in the fair value of derivatives are recorded each period, but these changes in value for certain derivatives (those considered hedges) are treated as other comprehensive income and thus bypass the income statement.

In U.S. financial statements, according to U.S. GAAP, four types of items are treated as other comprehensive income. - Foreign currency translation adjustments. - Unrealized gains or losses on derivatives contracts accounted for as hedges. - ___. - Changes in the funded status of a company’s defined benefit postretirement plans.

- Unrealized holding gains and losses on a certain category of investment securities, namely, available-for-sale securities

In U.S. financial statements, according to U.S. GAAP, four types of items are treated as other comprehensive income. - Foreign currency translation adjustments. - Unrealized gains or losses on derivatives contracts accounted for as hedges. - Unrealized holding gains and losses on a certain category of investment securities, namely, available - for - sale securities. - ___.

Changes in the funded status of a company’s defined benefit postretirement plans