Accounting: Chapter 2

Arrange the following accounts or captions in the order in which they appear on the income statement:

1. Net Sales 2. Gross Profit 3. Income from operations 4. Income before taxes (Page 35 Exhibit 2-2)

Selling, general, and administrative expenses include: (Select all that apply.)

Wages expense Advertising expense Depreciation expense (Page 35)

Which of the following account types is reported on the income statement? (Select all that apply.)

gains revenues losses expenses (Page 35)

Income from operations:

is a subtotal on the income statement that is not affected by the firm's tax rate or by amount of interest expense incurred (Page 35)

Income from operations: (Select all that apply.)

is frequently called operating income is a subtotal on the income statement that is not affected by the firm's tax rate or by amount of interest expense incurred is frequently called earnings from operations (Page 35)

Gross profit: (Select all that apply.)

is sometimes referred to as gross margin represents the sellers' maximum "cushion" available to cover all other operating expenses before it is possible to have net income (Page 35)

Cost of good sold: ( Select all that apply)

represents the total cost of merchandise sold to customers is frequently called cost of sales or cost of products sold is normally shown as a separate expense because of its significance (page 35)

Cost of goods sold:

represents the total cost of merchandise sold to customers (Page 35)