M1 - F2 - Income Statement and Balance Sheet Flashcards
The purpose of the _______ is to provide information about the uses of funds in the income process (i.e., expenses), the uses of funds that will never be used to earn income (i.e., losses), the sources of funds created by those expenses (i.e., revenues), and the sources of funds not associated with the earnings process (i.e., gains).
income statement
What are to method to record cost (2)
Expense immediately, or Capitalize (assets)
____ is the amount expended for items such as capital assets, services and merchandise received (amount actual paid for something)
Cost
_____ are cost that will expire in future periods and be charged (allocated in a systematic and rational manner or matched) against revenue from future periods.
Unexpired Cost
What are ways unexpired costs can be recorded : For Inventory?
Expensed to COGS
What are ways unexpired costs can be recorded : For prepaid insurance?
Expensed to insurance expense
What are ways unexpired costs can be recorded : For Fixed Assets?
Expensed as Deprecation expense (systematically over the life of the asset)
What are ways unexpired costs can be recorded : For Cost of patients
Expensed as Amortization expense (systematically over the life of the intangible asset)
_____ and _______- are recorded at gross amounts
Revenue and Expenses
______ and _______ are recorded as net amounts
Gains and Losses
What is the formula for calculating net amounts for gains and losses?
(Sells Price) Proceeds less Net book Value (..Carrying Value (Cost - Depreciation/Amortization)
if Proceeds are greater than NBV, A _____ is recorded.
Gain
if Proceeds are less than NBV, A _____ is recorded.
Loss
_________ have been eliminated by FASB
Extraordinary items
When should you record separate disclosures, when items are ______ or _____ or both
Unusual, or Infrequent
What are the two forms to present the income statement
Multiple-Step and Single Step Income Statement
Freight Out, Commission, Advertising and Selling Salaries are included in ___________expenses
Selling Expenses
Freight Out is included in ______ expenses
Selling Expenses
Officer salaries, insurance, property tax, accounting and legal are included in _______ expenses
General Admin Expenses
Income from Continuing Operations includes which two elements?
1) Operating Revenues & Expenses and 2) Non operating G&L
What is the equation from Gross Margin
Net Sales (Sales - Discounts - Refunds) Minus COGS
What is the equation for Income (loss) from Operations
Net Sales - COGS - Selling Expenses - G&A expenses - Deprecation Expense
What elements are included in Other Revenues and Gains
Gain on Sales of Equipment and Other Revenue (not included in Ops, and Interest Revenue
Interest Revenue is included in Which section of the income statement (if not a bank)
Other Revenues and Gains section
Interest Expense is included in which section of the income statement (if not core activity)
Other Expenses and Losses Section
What is the Equation for Multi-step Income Statement
Net Sales - COGS = Gross Profit - Expenses (GS&A expenses and deprecation) = Income from Ops + Other Revenues and gains - Other expenses and Losses = Income before Unusual Items and income tax - Unusual items = Income before Income Tax, - Income Tax Expenses = Net Income
Inventory cost include ______ and ______
purchase price and Freight In
Selling Expense include ______ and ______ and ______
Freight Out, Salaries and commissions, and Advertising
General and Administrative Expense include ______ and ______ and ______
Officer salaries, accounting and legal, insurance
Freight In is including in which expense?
Inventory Cost
Freight Out is included in which expense?
Selling Expense
What is the formula to calculate the gain or loss on insurance proceeds
Replacement Cost (amount paid by company) Minus deductible = Insurance Proceeds Less Cost and Carrying Value = Gain or Loss on Insurance Proceeds.
Loss on Sale of Available for sale securities or equipment would be included in which section on the income statement (multi-step I/S)
Income from Continuing Operations (unusual or Infrequent items)
Write offs , Write downs and abandonment is included in
Income from Continuing Operations (unusual or Infrequent items)
__________step included income from continuing operations, total expenses (including income tax expense) are subtracted from total revenue
Single Step Income Statement
What are the benefits of Single-step income statement?
Simple design and presentation types of expense aren’t user classified more important than others.
What is the equation for Single Step Income Statement?
Revenues and other items - Expenses and other items = = Net income
Minimum operating cycle for the purpose of reporting a prepaid current asset is ________
One year
What is bond sinking funds categorized on the balance sheet (current or non current)
Non Current Assets
What are overdrawn cash accounts categorized (current or non current)
Current Liability (if at separate bank and does not need to a positive number)
Cash is categorized as (current or non current)
Current Assets
If damages are frequent and not considered unusual is a disclosure required
No disclosure is requied
The _______ income statement reports revenues and expenses separately from nonoperating revenues and expenses and other gains and losses. I
multiple-step
In the ____ presentation of income from continuing operations, total expenses (including income tax expense) are subtracted from total revenues; thus, the income statement has a single step.
single-step
Under U.S. GAAP, entities may present a classified balance sheet that distinguishes ______ and _______ for assets and liabilities
current and non- current assets and liabilities
