M1 - F2 - Income Statement and Balance Sheet

Question 1

The purpose of the _______ is to provide information about the uses of funds in the income process (i.e., expenses), the uses of funds that will never be used to earn income (i.e., losses), the sources of funds created by those expenses (i.e., revenues), and the sources of funds not associated with the earnings process (i.e., gains).

Answer 1

income statement

Question 2

What are to method to record cost (2)

Answer 2

Expense immediately, or Capitalize (assets)

Question 3

____ is the amount expended for items such as capital assets, services and merchandise received (amount actual paid for something)

Answer 3

Cost

Question 4

_____ are cost that will expire in future periods and be charged (allocated in a systematic and rational manner or matched) against revenue from future periods.

Answer 4

Unexpired Cost

Question 5

What are ways unexpired costs can be recorded : For Inventory?

Answer 5

Expensed to COGS

Question 6

What are ways unexpired costs can be recorded : For prepaid insurance?

Answer 6

Expensed to insurance expense

Question 7

What are ways unexpired costs can be recorded : For Fixed Assets?

Answer 7

Expensed as Deprecation expense (systematically over the life of the asset)

Question 8

What are ways unexpired costs can be recorded : For Cost of patients

Answer 8

Expensed as Amortization expense (systematically over the life of the intangible asset)

Question 9

_____ and _______- are recorded at gross amounts

Answer 9

Revenue and Expenses

Question 10

______ and _______ are recorded as net amounts

Answer 10

Gains and Losses

Question 11

What is the formula for calculating net amounts for gains and losses?

Answer 11

(Sells Price) Proceeds less Net book Value (..Carrying Value (Cost - Depreciation/Amortization)

Question 12

if Proceeds are greater than NBV, A _____ is recorded.

Answer 12

Gain

Question 13

if Proceeds are less than NBV, A _____ is recorded.

Answer 13

Loss

Question 14

_________ have been eliminated by FASB

Answer 14

Extraordinary items

Question 15

When should you record separate disclosures, when items are ______ or _____ or both

Answer 15

Unusual, or Infrequent

Question 16

What are the two forms to present the income statement

Answer 16

Multiple-Step and Single Step Income Statement

Question 17

Freight Out, Commission, Advertising and Selling Salaries are included in ___________expenses

Answer 17

Selling Expenses

Question 18

Freight Out is included in ______ expenses

Answer 18

Selling Expenses

Question 19

Officer salaries, insurance, property tax, accounting and legal are included in _______ expenses

Answer 19

General Admin Expenses

Question 20

Income from Continuing Operations includes which two elements?

Answer 20

1) Operating Revenues & Expenses and 2) Non operating G&L

Question 21

What is the equation from Gross Margin

Answer 21

Net Sales (Sales - Discounts - Refunds) Minus COGS

Question 22

What is the equation for Income (loss) from Operations

Answer 22

Net Sales - COGS - Selling Expenses - G&A expenses - Deprecation Expense

Question 23

What elements are included in Other Revenues and Gains

Answer 23

Gain on Sales of Equipment and Other Revenue (not included in Ops, and Interest Revenue

Question 24

Interest Revenue is included in Which section of the income statement (if not a bank)

Answer 24

Other Revenues and Gains section

Question 25

Interest Expense is included in which section of the income statement (if not core activity)

Answer 25

Other Expenses and Losses Section

Question 26

What is the Equation for Multi-step Income Statement

Answer 26

Net Sales - COGS = Gross Profit - Expenses (GS&A expenses and deprecation) = Income from Ops + Other Revenues and gains - Other expenses and Losses = Income before Unusual Items and income tax - Unusual items = Income before Income Tax, - Income Tax Expenses = Net Income

Question 27

Inventory cost include ______ and ______

Answer 27

purchase price and Freight In

Question 28

Selling Expense include ______ and ______ and ______

Answer 28

Freight Out, Salaries and commissions, and Advertising

Question 29

General and Administrative Expense include ______ and ______ and ______

Answer 29

Officer salaries, accounting and legal, insurance

Question 30

Freight In is including in which expense?

Answer 30

Inventory Cost

Question 31

Freight Out is included in which expense?

Answer 31

Selling Expense

Question 32

What is the formula to calculate the gain or loss on insurance proceeds

Answer 32

Replacement Cost (amount paid by company) Minus deductible = Insurance Proceeds Less Cost and Carrying Value = Gain or Loss on Insurance Proceeds.

Question 33

Loss on Sale of Available for sale securities or equipment would be included in which section on the income statement (multi-step I/S)

Answer 33

Income from Continuing Operations (unusual or Infrequent items)

Question 34

Write offs , Write downs and abandonment is included in

Answer 34

Income from Continuing Operations (unusual or Infrequent items)

Question 35

__________step included income from continuing operations, total expenses (including income tax expense) are subtracted from total revenue

Answer 35

Single Step Income Statement

Question 36

What are the benefits of Single-step income statement?

Answer 36

Simple design and presentation types of expense aren’t user classified more important than others.

Question 37

What is the equation for Single Step Income Statement?

Answer 37

Revenues and other items - Expenses and other items = = Net income

Question 38

Minimum operating cycle for the purpose of reporting a prepaid current asset is ________

Answer 38

One year

Question 39

What is bond sinking funds categorized on the balance sheet (current or non current)

Answer 39

Non Current Assets

Question 40

What are overdrawn cash accounts categorized (current or non current)

Answer 40

Current Liability (if at separate bank and does not need to a positive number)

Question 41

Cash is categorized as (current or non current)

Answer 41

Current Assets

Question 42

If damages are frequent and not considered unusual is a disclosure required

Answer 42

No disclosure is requied

Question 43

The _______ income statement reports revenues and expenses separately from nonoperating revenues and expenses and other gains and losses. I

Answer 43

multiple-step

Question 44

In the ____ presentation of income from continuing operations, total expenses (including income tax expense) are subtracted from total revenues; thus, the income statement has a single step.

Answer 44

single-step

Question 45

Under U.S. GAAP, entities may present a classified balance sheet that distinguishes ______ and _______ for assets and liabilities

Answer 45

current and non- current assets and liabilities