Formulas
Sales - Sales Discount - Sales Returns & Allowances =
Net Sales
One way to increase gross profit would be to _________ sales revenue
increase
What section of the Income Statement is the account Interest Revenue recorded in?
Other Revenue
How many closing entries are made by a corporation?
4
1) Inc. Stmt. Credit balances
2) Inc. Stmt. Debit balances
3) Recording Net Income or Loss into Retained Earnings
4) Dividends account closing
All income statements include a COMS section, no matter what industry they are in.
False
Gross Profit - Operating Expenses =
Income from Operations
Value assigned to a share of stock & printed on the stock certificate
Par Value
What is the formula to find Gross Profit?
= Net Sales - COMS
In a closing entry for the income statement credit balances, what account are they closed into and will it be a DR or a CR?
Income Summary, CR amount
close CR balances by Debiting them
Data needed to prepare the Liabilities section of a balance sheet are obtained from the Debit column of an adjusted trial balance.
False
Liabilities are always Credits
Total Stockholders' Equity = __________ + _________
Ending Capital Stock + Ending Retained Earnings
Total original price of all merchandise sold during a fiscal period
COMS
COGS
Cost of Sales
(all correct)
The information to complete the Statement of Stockholders' Equity can be found in these three places:
1) Adjusted TB
2) General Ledger(s); and
3) ________ __________
Income Statement
No, those are permanent accounts
Every amount on a financial statement is accompanied by a related description.
false
Ending Retained Earnings = __________ + __________ - _____________
*assume a Net Income for the year
= Beginning Retained Earnings + Net Income - Dividends Declared
Preparing financial statements that provide information about a business’s financial condition, changes in this financial condition, and the progress of operations is an application of the accounting concept
Adequate Disclosure
The information needed to prepare the Balance Sheet can be found from what two places?
1) Statement of Retained Earnings
and
2) Adj. Trial Balance
If the corporation has a Net Income for the year, will the closing entry to Retained Earnings be a DR or a CR?
CR
Net Income = Income (normal CR's) - Expenses (normal DR's)
Net Income = Credits > Debits
In the preparation of financial statements, accounting principles are applied differently from one fiscal period to the next. Hint: Consistent Reporting Concept
False
Cost of Merchandise Sold (COMS) =
COMS = Beginning Inventory + Purchases - Ending Inventory
When are closing entries journalized and posted?
after the financial statements are prepared
Beginning Merchandise Inventory + Inventory purchased during the year = ______ __ _________ ___________ ____ ______
Cost of Merchandise Available for Sale
What is the closing entry to record Dividends?
DR Retained Earnings
CR Dividends
The amount of dividends paid during the year is presented on the income statement.
False
Statement of Stockholders' Equity