Preview

What You Must Know Income Statement

Satisfactory Essays
Open Document
Open Document
114 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
What You Must Know Income Statement
What you must know - Session 3- Income Statement

1. Evaluate the nature and importance of profit.

2. Know the format and purpose of the Income Statement and it’s relationship with the Balance Sheet

3. Understand the main measurement issue (“matching”)

4. Be aware of Sales Recognition issues

5. Be able to prepare a simple Income Statement

6. Be aware of the importance of Gross Profit

7. Know the difference between Operating Profit (EBIT) and Net Profit (PAT)

8. Have a basic practical understanding of Accrual Accounting and why it is used.

9. Know the basics of depreciation methods and how it appears in the Income Statement (versus the Balance Sheet)

10. Understand what are non recurring items appearing in the Income Statement.
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Xacc/280 Week 5 Assignment
    • 749 Words
    • 3 Pages

    Xacc/280 Week 5 Assignment

    A Financial Statement can be defined as, “Summary report that shows how a firm has used the funds entrusted to it by its stockholders (shareholders) and lenders, and what is its current financial position” (Business Dictionary, 2011). The Financial information is required for various users to make an informed Decision. “The purpose of financial information is to provide inputs for decision making” (Kimmel, Weygandt, Kieso, 2009, Para 1, p. 6). There are four different parts covered in a Financial Statement; those are Balance Sheet, Income Statement, Retained Earnings Statement, and Statement of Cash flow. The assignment will elaborate the purpose of each statement and differentiate its utility for different…

    • 749 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Ac550 Course Project
    • 579 Words
    • 3 Pages

    Ac550 Course Project

    To prepare a comprehensive balance sheet and Single-Step Income Statement presented in good form and derived from a list of various accounts. The amounts relative to each account will be given and the student will learn to determine whether an account is a balance sheet account or a temporary account that belongs to the income statement. The accounts will be comprised of all the various subgroupings in the balance sheet (Current Assets, Investment, Fixed Assets, Intangibles and Other Assets. As well as Current Liabilities, Long-term Liabilities and the Equity sections).Guidelines…

    • 579 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Accounting 20Cycle 20Memo 20Guidelines 4 1

    • 445 Words
    • 2 Pages

    Accounting 20Cycle 20Memo 20Guidelines 4 1

    3. Explanation of the prepared financial statements. Write at least a paragraph on each of the three financial statements you have prepared. Define the purpose of each financial statement and explain the information they uniquely provide to assist in decision making.…

    • 445 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    Acc 561 Financial Statements Differential
    • 910 Words
    • 4 Pages

    Acc 561 Financial Statements Differential

    Financial statements provide documentation of a company’s financial history for a set timeframe. One of the financial statement used by investors, creditors, and mangers is the balance sheet. The second statement used by accountant’s income statement, which is also important to shareholders. The third statement is the retained earnings statement, and the fourth financial statement is the statement of cash flows. Each financial statement has a different purpose and shows different aspects of the company’s finances. However, these financial statements are integrated and work together to provide shareholders financial information. This paper will defines the four financial statements while explaining the financial statement most suitable for either an investor, creditor, or management.…

    • 910 Words
    • 4 Pages
    Better Essays
    Read More
  • Powerful Essays

    Week 2 Lecture Notes Acct1501
    • 3629 Words
    • 15 Pages

    Week 2 Lecture Notes Acct1501

    Identify the components of financial statements • Describe the relationship between the balance sheet and the income statement • Understand the implications of the decision to record expenditure as an asset or as an expense • Understand the differences between cash profit and accrual profit Required Reading Trotman, Gibbins & Carson Chapter 2 AASB: Framework for Presentation of Financial Statements (downloadable from your course website or http://www.aasb.gov.au ) Session 1, 2013 2. Tutorial Questions – Week 3 Preparation Questions • • • DQ 2.1, 2.2 P2.3 Case 2A…

    • 3629 Words
    • 15 Pages
    Powerful Essays
    Read More
  • Good Essays

    ACCT 550 Week 1 homework
    • 473 Words
    • 2 Pages

    ACCT 550 Week 1 homework

    To prepare a comprehensive balance sheet and Single-Step Income Statement presented in good form and derived from a list of various accounts. The amounts relative to each account will be given and the student will learn to determine whether an account is a balance sheet account or a temporary account that belongs to the income statement. The accounts will be comprised of all the various subgroupings in the balance sheet (Current Assets, Investment, Fixed Assets, Intangibles and Other Assets. As well as Current Liabilities, Long-term Liabilities and the Equity sections).Guidelines…

    • 473 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    ACC 290 wk 1
    • 551 Words
    • 3 Pages

    ACC 290 wk 1

    This written essay will discuss the four basic financial statements used in accounting. It will describe the purpose of the four financial statements. How these statements would be useful to internal users, such as managers, and employees. How the external users, such as investors, and creditors would find these statements useful.…

    • 551 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Week 3 Healthcare Financing
    • 363 Words
    • 2 Pages

    Week 3 Healthcare Financing

    Referencing Chapter 10 in the text, and using evidence from other sources for support answer the following questions. If you owned your own business, how would you utilize the information reported on your balance sheet, statement of revenue and expense, and statement of cash flows? What determinations or decisions can be made with the information reported?…

    • 363 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Acc 220 Financial Statement
    • 264 Words
    • 2 Pages

    Acc 220 Financial Statement

    * A balance sheet is summary of a company's financial condition at a specific point in time, including assets, liabilities and net worth. It allows the company to know what they have been paying for or what they owe out to people. An income statement is a report that tracks a company’s revenues, gross profits, operating income, and net worth. All businesses need to have revenue in order to establish a good foundation to have their business up and running. A retained earnings statement is the portion of net income not paid out to investors in the business as dividends. If the company earns a profit they have to decide whether or not to invest it or keep it as theirs and distribute it evenly throughout the others in the company. Statement of cash flows provides information about an entity's cash receipts and cash payments during a period. Cash flow statements classify cash receipts and payments according to whether they stem from operating, investing, or financing activities. Assets are any item or items of economic value owned by an individual or corporation, especially that which could be converted to cash. A liability is an obligation that legally binds an individual or company to settle a debt. Comparative statements are financial statements for different periods that allow the comparison of figures to illustrate trends in a company’s performance. Stockholder’s equity is the part of the balance sheet that represents the capital received from investors in exchange for stock donated capital and retained…

    • 264 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Tax Depreciation
    • 4777 Words
    • 20 Pages

    Tax Depreciation

    4.1 Understand tax depreciation procedures and the effect of depreciation on the firm's cash flows.…

    • 4777 Words
    • 20 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Acct review 2300
    • 1472 Words
    • 6 Pages

    Acct review 2300

    b. Financial Statements – Know how to calculate each and all the parts in them…

    • 1472 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Accounting 1-4 Chapter
    • 100446 Words
    • 402 Pages

    Accounting 1-4 Chapter

    After studying this chapter, you should be able to: 1 Describe the primary forms of business organization. 2 Identify the users and uses of accounting information. 3 Explain the three principal types of business activity. 4 Describe the content and purpose of each of the financial statements. 5 Explain the meaning of assets, liabilities, and stockholders’ equity, and state the basic accounting equation. 6 Describe the components that supplement the financial statements in an annual report.…

    • 100446 Words
    • 402 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Balance Sheet and Income Statement Analysis
    • 553 Words
    • 3 Pages

    Balance Sheet and Income Statement Analysis

    -Identify the different components of Intangible assets (marketing, customer, contractual, technological, goodwill) and related accumulation amortization (if available). Locate the amortization methods and estimates used for the calculations.…

    • 553 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    environment of accounting
    • 343 Words
    • 3 Pages

    environment of accounting

    d. These financial statements involves the preparation of income statement, owners equity statement, balance sheet and cash flow statement.…

    • 343 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    accounting
    • 2924 Words
    • 12 Pages

    accounting

    CHAPTER 1 FINANCIAL ACCOUNTING AND ACCOUNTING STANDARDS Multiple Choice—Conceptual Answer No. Description d 1. Users of financial reports.…

    • 2924 Words
    • 12 Pages
    Satisfactory Essays
    Read More

Related Topics