Income Statement and Balance Sheet

Question 1

is redesigning packaging to make your product more environmentally friendly could be counted as a Charitable Donation?

Answer 1

No

Question 2

Do you add gain on debt extinguishment in operating income if it is usual and recurring even?

Answer 2

YES

Question 3

Is freight out a selling expense?

Answer 3

Yes

Question 4

Is advertising out a selling expense?

Answer 4

Yes

Question 5

Are Sales and commission a selling expense?

Answer 5

Yes

Question 6

Do you add the rent for office space if it is occupied by the sales department?

Answer 6

Yes

Question 7

How do you calculate the revenue in a single step Income statement?

Answer 7

Add all revenues and gains and get the total revenue amount except results from discontinued operations.

Question 8

Does net income include all the gains and losses in the multi-step income statement?

Answer 8

Net income is a bottom-line amount after all has been considered on the income statement, in both single or multi-step income statements.
It is income from continuing operations.

Question 9

What is income from the continuing operation?

Answer 9

It has two components operating (R, E) and non-operating income (G, L)

Question 10

Interest Expense is a

Answer 10

Separate line item, neither G&A nor Selling expense. if not a bank it is NON-OPERATING. Interest revenue is a separate line item in the Gain section.

Question 11

Advertising is a?

Answer 11

Selling Expense

Question 12

Salaries expense is a?

Answer 12

Part G&A and part Selling Expense

Question 13

Office space rent is a

Answer 13

Part G&A and part Selling Expense

Question 14

Freight out expense is?

Answer 14

Selling Expense

Question 15

Commission expense is a?

Answer 15

Selling Expense

Question 16

Depreciation expense is a?

Answer 16

Separate line item, neither G&A nor Selling expense

Question 17

Income tax expense is a?

Answer 17

Separate line item, neither G&A nor Selling expense

Question 18

Insurance expense is a?

Answer 18

General and administrative expense

Question 19

Bond Payable due next year (12 months) is?

Answer 19

Current Liability

Question 20

Deferred Income Tax Payable is?

Answer 20

Non-Current Liability

Question 21

Dividend Payable expected to be paid in 2 months is?

Answer 21

Current Liability

Question 22

Income tax payable for the current year is?

Answer 22

Current Liability

Question 23

Discount on Bond Payable current?

Answer 23

It is a contra liability account and should be deducted not added.

Question 24

Unearned revenue is a?

Answer 24

Liability

Question 25

Deposits from customers are?

Answer 25

Liability

Question 26

In preparing the statement, the line item displayed before considering income tax effects is?

Answer 26

Income (loss) from continuing operations. The line item displayed on a multiple step income statement that represents the difference between gross margin and operating expenses such as selling and general and admin

Question 27

Are estimated tax payments a current asset?

Answer 27

NO. it is an accrued expense, think check it.