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 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...
. If the business is a corporation, the balances will be transferred to the retained earnings account. Since the owner’s drawing account is not an income statement account, its balance will be closed by transferring...
What are the required financial statements? The required financial statements for U.S. business corporations are: Statement of income. This financial statement is also known as the statement of operations, statement of...
method of accounting) begins operations on December 27. The employees working from December 27 through December 31 will receive their first paychecks on January 4. If the employees earn a total of $5,000 of wages during...
statement, statement of earnings). Rather, the equipment’s cost will be reported in the general ledger account Equipment, which is reported on the balance sheet under the classification Property, plant and equipment....
and the depreciation expense begins. This expense will reduce the company’s profits (net income, earnings). There may also be some additional revenues and costs, and perhaps cost savings, that will also affect the...
, Accumulated Depreciation, Notes Payable, Accounts Payable, Payroll Taxes Payable, Paid-in Capital, Retained Earnings, and others. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
by the owners plus the company’s earnings that the owners chose not to withdraw as dividends or drawings. Additional Balance Sheet Information The balance sheet classifications allow the reader to easily compute the...
) is the difference between the number of shares issued and the number of shares outstanding. Since the treasury shares result in fewer shares outstanding, there may be a slight increase in the corporation’s earnings...
position and the for-profit corporation’s balance sheet is the equity section: The for-profit corporation’s equity section has the heading Stockholders’ Equity. Within this section are the paid-in capital amounts...
What is the profit and loss statement? Definition of Profit and Loss Statement The profit and loss statement, or P&L, is a name sometimes used to describe a company’s income statement, statement of income,...
and transferred to the owner’s capital account, thereby reducing owner’s equity. (At a corporation, the debit balances in the expense accounts will be closed and transferred to Retained Earnings, which is a...
financial statements of a U.S. corporation consist of a complete set of the following: income statement (statement of earnings, statement of operations) statement of comprehensive income balance sheet (statement of...
Where do you account for payroll taxes on the income statement? Definition of Payroll Taxes Payroll taxes are based on the wages (salaries, commissions, bonuses, etc.) of a company’s employees and on a self-employed...
of a corporation, the equity account is Retained Earnings. In the case of a sole proprietorship, the equity account is the owner’s capital account. As a result, the income statement accounts will begin the next...
or to a corporation’s retained earnings account.) Why Service Revenues is a Credit Service revenues (and any other revenues) will increase a company’s owner’s equity (or stockholders’ equity). Owner’s equity...
, Stockholders' Equity will decrease by an entry to Retained Earnings or to Dividends. No Effect Wrong. 4. The company receives cash from a bank loan. Assets Increase Right! The company's asset account Cash...
sheet (or) statement of financial position This financial statement reports a corporation’s assets, liabilities, and stockholders’ equity as of the final instant in an accounting period. Mark as wrong Mark as right...
's net income will cause a change in which component of stockholders' equity? Accumulated Other Comprehensive Income Wrong. Paid-in Capital Wrong. Retained Earnings Right! 7. Which financial statement's...
. A current asset is an asset that will turn to cash or be consumed within the longer of 1) one year, or 2) the __________ cycle. 21. A corporation’s stockholders’ equity section of its balance sheet could contain...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
, but only two interest payment dates. Mark as wrong Mark as right callable bond This feature of a bond requires the bondholder to sell the bond to the issuer at the price specified in the bond indenture. callable bond...
Our Explanation of Improving Profits will assist you in focusing on the costs and revenues that are relevant (and ignoring those which are not relevant) for improving profits and eliminating losses. Examples of the...
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...
a corporation’s Retained Earnings account (or a sole owner’s capital account) and will be closed to these balance sheet equity accounts at the end of the accounting year. Join PRO to Track Progress Mark the Question...
Entries The closing entries will transfer all of the year-end balances from the revenue accounts and the expense accounts to a corporation’s retained earnings account or a sole proprietorship’s owner’s equity...
balance. ACCUMULATED MDAUCCUALET Unscramble ACCUMULATED LACUDMAUTEC Unscramble 15. The Retained Earnings account will be reduced with a __________ entry. DEBIT BDIET Unscramble DEBIT BTIDE Unscramble 16. ______________...
and the corporation’s federal and state incremental income tax rates. In this context, stock usually refers to shares of common stock, which is evidence of an ownership interest in a corporation. Corporations decide...
as the __________ __________ __________ sold. 20. The annual cost of goods sold divided by the average inventory during the year is the formula for the inventory __________ ratio. Any questions left unanswered will be...
requires two pounds of plastic pellets. The company's practice is to have on hand at the end of each month 60% of the pounds of plastic pellets required for the following month's production. The purchases of...
, a bond's interest payments form an ordinary __________. ANNUITY YNTNIUA Unscramble ANNUITY NNATIYU Unscramble 19. Most bonds are __________ by the issuing corporation at a price specified in the bond's...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
. Current Market Value Wrong. Because of the cost principle, assets are generally not reported at their current market value. Expected Selling Price Wrong. This would violate the cost principle. 8. Obligations (amounts...
a catalog’s list price. Use the following information for answering Questions 6 - 8: A supplier shipped goods to the buyer on December 28. The buyer received the goods on January 2. The terms were FOB shipping point....
requires that the Owner's Draws account has to be debited. 17. What balance would you expect in a successful corporation’s Retained Earnings account? Select... Debit balance Credit balance View Coaching The...
ratio is computed by dividing the net credit __________ sales for the year by the average amount of accounts receivable during the year. 28. The days' sales in accounts receivable is calculated by dividing...
are FOB __________. 6. FIFO is an inventory __________ __________ assumption. 7. When a company uses FIFO, its inventory might be reported at the lower of __________ or __________ __________ __________. 8. The inventory...
% discount of $90 is allowed if the buyer remits $8,910 within 10 days of the invoice date. Trade Discount A trade discount is a discount expressed as a percentage of a list price. The percentage may vary according to...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
at the beginning of the current period. Contractual Wrong. Coupon Wrong. Market Right! 15. A bond's maturity value is more likely to be its __________. Issue Price Wrong. Par Amount Right! 16. A 12% $100,000 bond...
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