profit might have a variety of definitions. We will assume that net profit means a company’s net sales minus all expenses. The expenses include the cost of goods sold, the selling, general, and administrative...
profit might have a variety of definitions. We will assume that net profit means a company’s net sales minus all expenses. The expenses include the cost of goods sold, the selling, general, and administrative...
usually accept a fixed cash dividend that will be paid by the corporation before the common stockholders are paid a dividend. In exchange for this preferential treatment of dividends, the preferred stockholders...
%)]. Since bonds are a form of debt, the existing stockholders’ ownership interest in the corporation will not be diluted. Therefore, the future gains from use of the bond proceeds (minus the bond interest payments)...
, gains and losses (except for items stipulated as other comprehensive income) for a period of time such as a year, quarter, 13 months, etc. Statement of comprehensive income. This financial statement begins with the...
on its investments. The investment interest and dividend amounts earned will be reported on the income statement as other income. To provide more clarity, accountants use the term net income to describe the amount...
Our Explanation of Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
’ interim financial statements will include four 13-week periods instead of four 3-month quarters. Income Statement The income statement reports a corporation’s revenues, expenses, gains, losses, and the resulting...
’ equity known as accumulated other comprehensive income can increase from which of the following items? Select... Foreign currency translation adjustments Gain on sale of equipment Unrealized gains on value of...
at cost rather than at higher amounts. Accountants are not allowed to recognize gains from merely holding the land. To be able to recognize a gain on the land, the company would have to sell the land. Economic Entity...
accounting __________ principles. 15. The profitability of a company for a specified period of time is reported on the __________ income statement. 16. The main components or elements of the income statement are...
Our Explanation of Debits and Credits describes the reasons why various accounts are debited and/or credited. For the examples we provide the logic, use T-accounts for a clearer understanding, and the appropriate general...
stock that were outstanding during the year. 29. Which of the following is NOT included in a corporation’s net income? Select... Gain on sale of the corporation's warehouse Unrealized gains/losses on...
How can a company with a net loss show a positive cash flow? Definition of Net Loss A net loss occurs when a company’s revenues and gains are less than its operating expenses, other expenses and losses. The net loss or...
Unscramble 7. Full __________ is achieved through the notes to the financial statements. DISCLOSURE COSRISEULD Unscramble DISCLOSURE RELUIDSOSC Unscramble 8. Results in the reporting of contingent losses, but not...
. Earnings per share must be reported on the income statement when a corporation's stock is publicly ___________. TRADED ETRADD Unscramble TRADED DDTERA Unscramble 12. An increase in net assets from a peripheral...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
and administrative expenses Nonoperating expenses (or other expenses) which were incurred but were outside of the corporation’s main activities. An example is the interest expense incurred by a retailer. Gains An...
Our Explanation of Nonprofit Accounting includes a chart that contrasts the financial statements of a nonprofit (or not-for-profit) organization with those of a for-profit business corporation. There are many examples to...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
statement covers the period of time shown in its heading. 3. Amounts earned by a company in its main operating activities are known as __________. Revenues Right! This is the correct answer. Gains Wrong. Gains pertain...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
of the balance sheet? Expenses Wrong. Expenses are an element of the income statement. (However, expenses do cause a decrease in owner's/stockholders' equity on the balance sheet.) Gains Wrong. Gains are...
Our Explanation of Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
Our Explanation of Debits and Credits describes the reasons why various accounts are debited and/or credited. For the examples we provide the logic, use T-accounts for a clearer understanding, and the appropriate general...
ledger accounts. It also requires that the amounts recorded as debits must be equal to the amounts recorded as credits. Mark as wrong Mark as right credit This term indicates the right side of a general ledger account....
This financial statement reports a corporation’s revenues, expenses, gains, losses, and the resulting net income. This is sometimes referred to as the P&L. income statement (or) statement of operations (or)...
for Revenues and Expenses are Temporary Accounts At the end of each accounting year, the income statement accounts (revenues, expenses, gains, losses) are closed to a stockholders’ (owner’s) equity account. As a...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
. Extraordinary Items Wrong. Gains And Losses Wrong. Net Income Right! 11. Which financial statement reports the adjustments for foreign currency translation? Statement Of Cash Flows Wrong. Statement Of Comprehensive...
is the __________ __________. 19. Assets minus __________ equals owner’s equity (or stockholders’ equity). 20. An income statement reports revenues, __________, gains, and losses. 21. The balance sheet is also known...
of a company’s main operations? Select... gains revenues 5. The matching principle is best achieved when a company’s vacation expense and liability are reported in the period when the employees __________ the...
. A corporation cannot report a loss (or a gain) on its income statement from the sale of its treasury stock. False Right! 25. If preferred stockholders have the opportunity to receive more than the stated dividend...
Our Explanation of Chart of Accounts shows how a typical chart of accounts is organized and examples of possible account numbering. It concludes with a quick review of debits and credits.
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
Our Explanation of Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...
This term indicates the right side of a general ledger account and it is the normal balance for liability, stockholders’ equity, revenue, and gain accounts. credit This term indicates the right side of a general...
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