Statement of Comprehensive Income Flashcards
Statement of Comprehensive Income also know as the?
Income Statement
What is Statement of Comprehensive Income?
A financial statement that gives information on the revenues earned and the expenses incurred by the business for a certain period of time.
Is defined as fees earned from providing services and the amounts of merchandise sold.
Revenue
If the revenues earned are from a main activity of the business, they are considered?
Operating Revenues.
If the revenues come from a secondary activity, they are considered?
Non-Operating revenues
Is the reduction in value of an asset as it is used to generate revenue?
Expense
What are the two forms of presenting expenses in the SCI?
-Natural form
-Functional form
The natural form is also called?
Single-step form
Where only two sections are presented in the SCI- the revenue section and the operating expenses section.
Natural Form
The Functional form, also called ?
the multiple-step or multi-step form
Is normally applicable to businesses with more complex operations, in this form, expenses are grouped according to function - cost of sales, selling expenses, administrative expenses, and other nonoperating expenses?
Functional form or multiple step form
A transaction that increases assets and/or decreases liabilities leading to an increase in equity resulting from operations of the business and not from owner’s contribution
Income
A transaction that decreases assets and or increases liabilities leading to an decrease in equity resulting from operations of the business and not from distribution to owners.
Expense
Incurred in the process or as a result of the primary operations of the business
Operating expenses
Incurred in the non-primary operations of the business
Non-operating Expenses
Income derived from the other activities of the business
Gains
Refers to earnings made by any business that is into rendering services
Service Revenue/Income
Earnings made by any business that is into selling goods or merchandise
Sales
Interest credited by the bank to the account of the business arising from bank deposits.
Interest income
Earnings made by professionals or experts from rendering services to their clients
Professional Fees
Contra-sales account used to report the decreases in the seller’s receivable from a customer’s return of merchandise measured by its selling price or from granting the customer an allowance from the amount owed to the seller
Sales Returns and Allowances
Contra-sales account used to report the amount of discount taken by customers
Sales Discount
Total sales less sales discount and sales returns and allowances
Net Sales
This is the direct cost of purchasing the goods that were sold during the financial year
Cost of Sales ( Cost of goods sold)
Keeps track of inventory levels on a daily basis and Inventory account is “perpetually” updated for goods purchased and sold
Perpetual Inventory Method
Does not update the inventory account for purchases and sales
Periodic Inventory Method
Account that is used to report acquisitions of merchandise for sale using the periodic inventory method
Purchases
Contra-purchase account that reports the cost of goods returned to suppliers
Purchase returns and allowances
Contra-purchase account that reports the amount of discount taken by the company.
Purchase Discount
Refers to shipping cost necessary to bring inventory purchased from the seller to the premises of the company
Freight-In
Is gross purchases plus Freight-in Less Purchase returns and allowances and purchase discounts
Net Purchases
Cost involved in operating a business, other than cost of sales, such as rent, utilities, and salaries.
Operating Expenses
Cost associated with the usage of electricity, water, and communication for a particular accounting period
Utilities Expense
Costs incurred associated with services rendered normally by permanent and full-time employees who are paid on a regular basis usually monthly
Salaries Expense
Costs incurred associated with the services rendered normally by contractual and temporary employees and workers who are paid on an hourly rate or based on output.
Wages Expense
Costs incurred to register the business, to acquire the right to operate, and to settle taxes
Taxes and Licenses Expense
Refers to the amount of supplies that was used during a particular accounting period.
Supplies Expense
Amount of loss resulting from uncollectible accounts receivable
Bad Debts Expense
The allocated portion of a property, plant, and equipment asset’s cost that is transferred to an expense account in the current accounting period
Depreciation Expense
Groups all revenue together and groups all expenses together (total revenues - total Expenses)
Single-Step Approuch
