WGU C213 The Income Statement

EPS

Earnings Per Share-is the amount of net income associated with each share of stock.

Gaines and Losses

When a company makes or loses money on activities that are peripheral to its primary operations, the amount is classified as a gain or a loss instead of as a revenue or an expense.

Time Period

ccountants to exercise judgment in unraveling the income effects of business deals that are only partially completed by the end of the reporting period

Revenue

is the amount of assets created through the performance of business operations

Net Income

is typically viewed as the fundamental measure of a company's profitability, but there are also a variety of other measures of "income."

What is the purpose of the income statement?

reports the amount of net income earned by a company during a period, with annual and quarterly income statements being the most common

What accounts are shown on the income statement?

revenues, expenses, gains, and losses

Matching Prinicple

states that expenses should be recorded during the period in which they are incurred, regardless of when the transfer of cash occurs.

Revenue Recognition

Work is Done - Meaning goods have been delivered Cash mush have been Collected -

Expense

are the amount of assets consumed in doing business