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
