Financial statement

Question 1

Periodic inventory system

Answer 1

Beginning inventory + Purchases = cogs available for sale - ending inventory = cogs

Question 2

Single-step

Answer 2

All data are classified as either (1) revenues or (2) expenses (revenue right side, expenses left side, profit right side)

Question 3

Multi-step

Answer 3

Five steps involved in preparing the statement

Question 4

1. Net Sales

Answer 4

Sales less returns, allowances, discounts

Question 5

2. Gross Profit

Answer 5

Net Sales less Cost of Goods Sold

Question 6

3. Profit from Operations

Answer 6

Gross Profit less Operating Expenses

Question 7

4. Non-Operating Activities

Answer 7

activities not related to operations

Question 8

5. Profit

Answer 8

Profit from Operations + Non-operating Activities