Profit & Loss statement (also referred as Income statement), statement of financial performance, earnings statement, operating statement or statement of operations) is a company's financial statement how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). It displays the revenues recognized
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differences related to the Presentation of the Balance Sheet and Income Statement between US GAAP and IFRS (keep in mind that Presentation differences do not give rise to differences in financial results; they are merely different ways to present the same data): Statement Affected | Issue | US GAAP | IFRS | Income Statement | Basic presentation | Multi-step presentation | May use a multi-step or single-step presentation. | Income Statement and Balance Sheet | Consolidation | Consolidation required
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TRUE-FALSE STATEMENTS 8. Closing entries are not needed if the business plans to continue operating in the future and issue financial statements each year. 9. The dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period. 10. After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances. 11. Closing revenue and expense accounts to the
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a) What type of income statement format does P&G use? Indicate why this format might be used to present income statement information. The type of income statement format that P&G uses is the single-step income statement format. This format is often used by companies to report revenues, gains, expenses, and losses. In this particular format, expenses are deducted from revenues in order to arrive at a net income or a net loss which is where the term “single-step” came from. The companies
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posting of income and expenses. Expenses are recorded as debits on the left side of a T account and income is recorded as a credit on the right side of the T account. This PhxKlips made it clear to me that debits increase assets and expenses and decrease liability and equity accounts as well as increasing income accounts. The “Financial Statements” PhxKlips delineated four financial statements that are used to report all company financial information in standard formats. The four statements are the
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Financial Statements ACC/280 July 23, 2011 Cary Schulz, Facilitator Financial Statements Accounting is a critical aspect of any organization; without accounting a business will not be successful. This paper will inform one of the purposes of accounting; the four basic financial statements; how the basic financial statements are interrelated; and why they are useful for managers, investors, creditors, and employees. Accounting is crucial for every business. Purpose of Accounting Accounting
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accounting helps to memorize all the transactions with records, it is the objective of accounting. * To ascertain operating results- * Accounting ascertains whether the business has earned a profit or suffered a loss by preparing profit and loss statements,
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________________________________________ GOALS Your goals for this "reporting cycle" chapter are to learn about: • Preparation of financial statements. • The accounting cycle and closing process. • The nature of "optional" reversing entries. • Classified balance sheets. • The importance of business liquidity and the concept of an operating cycle. DISCUSSION PREPARING FINANCIAL STATEMENTS THE TOUGH WORK IS DONE: In the previous chapter, you learned all about adjustments that might be needed at the end of each
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profit. Here is a very basic income statement that computes the gross profit: John's Products | | Partial Income Statement | | For Month Ended 1/31/2013 | | | | Sales (20 units * $10) | $200 | Cost of Merchandise Sold (20 units * $5) | $100 | Gross Profit | $100 | Expenses | 0 | Net Income | $100 | Note that 20 units of product were sold for $10 each. The ones that were sold cost $5 each, resulting in gross profit of $100. The balance sheet for John's Products will show
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CHAPTER 4 INCOME STATEMENT AND RELATED INFORMATION IFRS questions are available at the end of this chapter. TRUE-FALSe—Conceptual Answer No. Description T 1. Usefulness of the income statement. F 2. Limitations of the income statement. F 3. Earnings management. T 4. Transaction approach of income measurement. T 5. Single-step income statement. T 6. Revenues and gains. F 7. Multiple-step vs. single-step income statement. F 8. Multiple-step income statement. T 9. Multiple-step
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