Finance Questions
Explore questions in the Finance category that you can ask Spark.E!
the ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period
the 'matching expenses with revenue' accounting concept is applied when the revenue earned and the expenses incurred to earn that revenue are reported in the same fiscal period
component percentages on an income statement are calculated by dividing sales by total expenses by net income
the formula for calculated for the income statement and the net income on the worksheet must be the same
the 'adequate disclosure accounting concept' is applied when financial statements contain all info necessary to understand a business' financial condition
when a business has two different sources of revenue, a separate income statement should be prepared for each kind of revenue
a balance sheets reports financial info on a specific date includes assets, liabilities, and owner's equity
the financial condition of a business refers to its financial strength
for a service business, the revenue reported on an income statement includes components for total expenses and net income
the current capital to be reported on a balance sheet is calculated as: the capital account balance plus net income equals current capital
an income statement reports info over a period of time, indicating the financial progress of a business in earning a net income or a net loss
reporting in the same fiscal period the revenue earned and the expenses incurred to earn that revenue as in application of the accounting concept 'matching expenses with revenue'
the formula for calculating the total expenses component percentage is: total expenses divided by total sales equals total expenses component percentage
a component percentage is the percentage relationship between one financial statement item and the total indicated that item
info needed to prepare an income statement comes from the trial balance columns and the income statement columns of a worksheet
the owner's capital account reported on a balance sheet is calculated as: capital account balance plus drawing account balance less net incomes
the owner's equity section of a balancing sheet may report different kinds of details about owner's equity, depending on the need of the business
an amount written in parenthesis on a financial statement indicates am estimate
a balance sheet reports financial info over a specific period of time
on an income statement, double lines are ruled across both columns to indicate that debits equal credits