Adventis FMC Level 1 MC Practice Exam Complete Solutions | Already Passed| Verified
what is the purpose of the income statement?
What does it indicate? - ✔✔to show stakeholders if the firm made or lost money during the period
being reported
it indicates how revenues are transformed into net income
define:
Revenue - ✔✔the amount charged for the delivery of goods and services
define:
COGS - ✔✔direct costs of producing revenue
define:
Operating Expense - ✔✔all other expenses required to run the business
what does Operating Income indicate?
-what is the other word for it? - ✔✔Op income indicates a company's earnings power from ongoing
operations
Another work for Operating profit is EBIT
what does net profit indicate for the shareholder? - ✔✔indicates the increase in shareholder value
resulting from the operations of the firm
list the general flow of the income statement - ✔✔revenue
(COGS)
Gross Profit
(Operating expense)
Operating Income
(non Op Expense)
(Tax)
Net Income
what does the balance sheet show - ✔✔it is a financial statement that represents the financial position
of the company on a particular date