INTELLIPATH UNIT 1
Under accrual-basis accounting, revenues are recognized when cash is ____, and expenses are recognized which cash is _________
Earned; incurred
Operating income may be calculated as ______________
Gross margin minus operating expenses
The difference between the selling price of a product and the cost of the product is called __________
Gross profit
Separating operating revenues and expenses from other items allows users of financial statements to ____________
Identify activities that are ongoing as opposed to those that are not
The financial statement that shows the performance of the company by subtracting expenses and costs from revenues and gains for one accounting period is the _________
Income Statement
Which of the following accounts would not be included under operating expenses on the multistep income statement
Interest expense
Which of the following is true about the gross profit percentage
It is computed by subtracting the cost of goods sold from sales and dividing the result by sales
Which of the following is the preferred income statement presentation under the Generally Accepted Accounting Principles (GAAP)
Multistep
Which of the following items is listed first on an income statement
Revenue
Net income is ____________
The primary way of evaluating the financial performance for a business
A corporate income statement does not contain ____________
Unrealized investment gains and losses
Which of the following accounts would appear on the income statement
Utility Expense
On a multistep income statement, income from continuing operations __________
can equal, exceed, or be less than the net income
Interest expense, as reported on the income statement, _______
is a separate line item that is not included in expenses
Net income is defined as ________
revenues minus expenses