Module 3 (Financial Statements) Flashcards
Current or Non-current Liability…
Notes Payable?
Non-current
Current or Non-current Liability…
Accrued Expenses?
Current
Current or Non-current Liability…
Accounts Payable?
Current
Current or Non-current Liability…
Taxes Payable?
Current
Current or Non-current Liability…
Mortgage Payable
Non-Current
Current or Non-current Asset…
PP&E?
Non-Current
Current or Non-current Asset…
Liquor License?
Non-Current
Current or Non-current Asset…
Inventory?
Current
Current or Non-current Asset…
Prepaid Insurance?
Current
Current or Non-current Asset…
Software?
Non-current
Current or Non-current Asset…
Furniture & Equipment?
Non-current
Current or Non-current Asset…
Goodwill?
Non-current
Current or Non-current Asset…
Acquired Intangible Assets?
Non-current
The income statement reflects a company’s:
A - Financial position over a given period of time.
B - Financial position at a given point in time.
C - Financial performance over a given period of time.
D - Financial performance at a given point in time.
C - Financial performance over a given period of time.
Which of the following items represents the net income/(loss) for the year?
A - The difference between the revenues/gains and expenses/losses.
B - The difference between the cash receipts and payments.
C - The difference between the funds raised by stock issuance and the dividends paid.
D - The difference between the net increase in assets and in liabilities.
A - The difference between the revenues/gains and expenses/losses.
Which of the following are steps in the closing process? Select all that apply.
A - Nominal accounts are reset to zero.
B - Real accounts are reset to zero.
C - Net income is transferred to the cash account on the balance sheet.
D - Net income is transferred to the retained earnings account on the balance sheet.
E - The retained earnings account is reset to zero.
A - Nominal accounts are reset to zero.
D - Net income is transferred to the retained earnings account on the balance sheet.
For the year 2015, Dark Horse Corp.’s sales revenue was $1,600,000. Cost of goods sold (COGS) was 40% of sales revenue. Their income statement shows that operating expense was $150,000.
What was Dark Horse Corp.’s gross profit for 2015?
$960,000
Gross Profit is equal to Sales Revenue minus Cost of Goods Sold, in this case $1,600,000 - $640,000 = $960,000.
The Cost of Goods Sold of $640,000 is found by multiplying $1,600,000 by 40%.
For the year 2015, McGuire’s Auto had Operating Income of $320,000. It also had the following expenses:
Salaries and Wages Expense $75,000 Building and Utilities Expense $86,000 Interest Expense $122,000 Income Tax Expense $84,000 Cost of Goods Sold (COGS) for the year was $440,000
What would McGuire’s Auto’s gross profit be for 2015?
$481,000
To get to Gross Profit from Operating Income, we must add back any Operating Expenses. In this case we start with $320,000 Operating Income and add back Salaries and Wages Expense of $75,000 and Building and Utilities Expense of $86,000, to get Gross Profit of $481,000.
