Week 2- The Income Statement

Revenues cause:

An increase in net assets

Costs that are incurred during the normal operations of a business to generate revenues are called:

Expenses

The difference between sales and cost of goods sold is called:

Gross profit

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or a year, is called a(n):

Income Statement

Which of the following is an overall measure of the performance of a business entity's activities?

Net income (or net loss)

Resource increases from the sale of goods or services are called:

Revenues

Which of the following is a revenue generating activity?

Selling a product

Another name for the income statement is:

Statement of earnings

The beginning balance of retained earnings will be greater than the ending balance if:

The company has a net income less than dividends paid

Retained earnings are:

earnings of a company that have been retained in the company