Income Statements
Net income is calculated by
What is revenues - expenses?
This shows that the column totals have been verified as correct.
What is a double line?
Net income is found on both the Income Statement and Balance Sheet.
What is false? (Income Statement only)
This is the area of accounting that focuses on reporting information to external users.
What is financial accounting?
The three heading lines of an income statement
What is company name, "Income Statement", for month ended-date?
The three lines that head a balance sheet
What is company name, "Balance Sheet", date ?
An amount written in parenthesis on an Income Statement or Balance Sheet indicates a negative amount.
What is true?
This is a comparison between two components of financial information, calculated by dividing the amount of each component by the total amount of sales.
What is financial ratio?
The four sections of an income statement
What are heading, revenues, expenses, and net income (net loss)?
The four sections of a balance sheet
What are heading, assets, liabilities, and owner's equity?
External users of accounting information include bankers, creditors, stockholders, government agencies.
What is true?
Accounting that is focused on internal users
What is Managerial Accounting?
This is how you calculate the Total Expenses Ratio
What is Total Expenses divided by Total Sales?
This is the accounting equation.
What is Assets = Liabilities + Owner's Equity ?
If a company has more than 1 revenue source, separate income statements should be prepared for each source.
What is false?
This is the ratio of net income to total sales.
What is Return on Sales (ROS)?
When revenues earned and the expenses incurred to earn the revenue are reported in the same financial period
What is the concept of matching revenues and expenses?
This is how the balance of the Owner's Equity account at the end of the month is calculated.
What is Capital at the Beginning of the Month plus Net Income (or minus Net Loss) minus the Owner Drawing account?
The Full Disclosure accounting concept is applied when a company always prepares financial statements at the end of each monthly fiscal period.
What is false?
The reporting of an amount on a financial statement as a percentage of another item on the same financial statement
What is vertical analysis?