ACCT 284

Income Statement Equation

Revenues - Expenses = Net Income

Accounts are:

used to accumulate and report the effects of each different business activity.

Ace Electronics had the following increases in the cash account during the month: $20,000 from owners for stock; $5,000 from sales to customers; and $15,000 borrowed from River Bank. Ace's revenue for the month was _____

$5000

The statement of retained earnings reports the ______.

profits that have accumulated in the company over time

When a company is owed for sales made to customers on credit, the asset called:

Accounts Receivable will be reported on the balance sheet.

A company owns an economic resource that will provide it with future benefits. This economic resource is ______.

An asset

An asset is defined as a(n) ______.

economic resource expected to benefit the company in the future

The order in which liabilities are reported on the balance sheet is based on when the liability is:

expected to be paid or settled.

The order in which assets are reported on the balance sheet is based on when the asset is ______.

expected to be used or turned into cash

The heading of an income statement ______.

includes the time period covered indicates if the reported numbers are rounded to the nearest thousand or million includes the name of the company

Expenses appear on the ______.

income statement

Financial statements can be prepared ______.

on a fiscal year basis on a monthly basis on a quarterly basis

The unit-of-measure assumption states that ______

results of business activities should be reported in an appropriate monetary unit

order of income statement

revenue expense net income

An income statement includes which of the following item(s). (Select all that apply.)

revenues expenses net income

A corporation earns profits for its stockholders by ______.

selling goods at more than their cost providing services at more than cost

A financial statement heading states that it was prepared: "For the Year Ended December 31, 2020." What types of financial statements could this be?

statement of cash flows income statement statement of retained earnings

Accounts Receivable is ______.

the amount the company expects to collect for previous credit sales

The heading of an income statement should include ______

the title "Income Statement" the name of the business the accounting period covered by the statement

The unit of measure concept is the idea that a company should report its financial results on its financial statements using ______.

a single monetary unit, such as the US dollar

Which financial statement reports revenues and expenses?

Income statement

Which of the following are found on a balance sheet? (Select all that apply.)

Liabilities Assets Stockholders' Equity

A company's fiscal year end is a:

12-month period ending on a day other than December 31.

Place the balance sheet line items in the proper order from top to bottom.

1. cash 2. supplies 3. equipment 4. Accounts payable 5. common stock 6. retained earning

Statement of cash flows and how they appear on said statement

1.operating activities 2.investing activities 3.financing activities

Individual expenses are accumulated in separate _______.

Accounts

______ are used to accumulate and report the effects of each different business activity separately rather than combining the various types of activities together.

Accounts

Which of the following are true about the income statement?

Each major caption has an underlined subtotal, such as Total Expenses. A dollar sign appears only at the top and bottom of the column of numbers. Net Income has a double underline. Revenues are listed before expenses.

Which of the following accounts are liabilities? (Check all that apply.)

Taxes Payable Wages Payable Accounts Payable Note Payable

The heading of a balance sheet should include which of the following? (Check all that apply.)

The title "Balance Sheet" At December 31, 2020 The name of the business

True or false: A fiscal year can end on a date other than December 31. A calendar year ends on December 31.

True: A company will typically pick a fiscal year end that is the start of its slow business period. It is not required to pick a calendar year end of December 31.

Which of the following accounts are liabilities

Wages Payable Accounts Payable Taxes Payable Note Payable

Pizza Aroma delivered $500 of pizzas to the local high school, but hasn't received payment yet. Pizza Aroma will report ______.

accounts recievable

Acme Enterprises, a consulting firm, bought 4 boxes of copy paper from an office supply store for $15 each. The copy paper would be reported as ______.

an asset, Supplies

Income statements ______.

are sometimes called the statement of operations report revenues minus expenses

A balance sheet shows ______.

assets, liabilities, and stockholders' equity at a single point in time