Jordan ACC200 Exam 2(Modules 4-6); Questions & Answers 100% Verified
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Course
ACC 200
Institution
ACC 200
Jordan ACC200 Exam 2(Modules 4-6);
Questions & Answers 100% Verified
Who cares about income statements? Correct answer-Stakeholders (people who have an
interest in the business and are affected by its performance)
Why is an income statement valuable? Correct answer-Stakeholders use it to ass...
Jordan ACC200 Exam 2(Modules 4-6);
Questions & Answers 100% Verified
Who cares about income statements? Correct answer-Stakeholders (people who have an
interest in the business and are affected by its performance)
Why is an income statement valuable? Correct answer-Stakeholders use it to assess
profitability and sustainability of an entity
What are the 2 elements of an income statement? Correct answer-Revenues and
expenses from the central part of the business
What is the "bottom line" and how is it calculated Correct answer-bottom line: net
profit/loss
Calculated by Revenues - expenses
What are other names for the income statement? Correct answer-- Profit & Loss
Statement (P&L)
- Consolidated statement of operations
- Consolidated statement of income
, Jordan ACC200 Exam 2(Modules 4-6);
Questions & Answers 100% Verified
Describe comparative financial statements Correct answer-These display trends in
regards to earnings' risk/growth by showing us information from MULTIPLE periods.
Benefits of a one month period for income statements Correct answer-Can reassess
direction or operation based on this short period
- Mainly for management
Benefits of a one quarter period for income statements Correct answer-Can identify if
annual goals can be reached by grouping several months at a time
- Used by management and investors
The point of a one year period for income statements Correct answer-Shows longer term
trends that internal and external stakeholders want to see
- Mainly for external stakeholders
The term _____ refers to the difference between revenues and expenses Correct answer-
NET
, Jordan ACC200 Exam 2(Modules 4-6);
Questions & Answers 100% Verified
(could be net income, net loss, etc.)
2 options for what to do with net income Correct answer-- Could be distributed to
stockholders in the form of dividends
OR
- Net income may be retained for growth, expansion, etc.
What is typically labeled as "sales" on the income statement? Correct answer-Revenues
from selling TANGIBLE products
What is typically labeled as "fees earned" or "service revenue" on the income statement?
Correct answer-Revenues from providing SERVICES like education, doctors, lawn care,
etc.
What is typically labeled as "other revenue" on the income statement Correct answer-
Revenues from incidental activities that are NOT considered primary operations of business
MRS. JORDAN VOCAB: What does LT mean? Correct answer-Long Term
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