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10 Cards in this Set

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  • Back
The financial statements must be prepared in the following order:
income statement, statement of owner’s equity, balance sheet, and statement of cash flows.
Net income (or net loss) is reported on the
income statement.
Report ______ if revenues exceed expenses. Report _____ if expenses exceed revenues.
a net income
a net loss
a.Expenses are listed in ______ order.
decreasing
a.The formula for net income is:
Revenues - Expenses = Net income
1.The statement of owner’s equity appears in the following format:
Owner’s capital, beginning of the period
Add: Investments by owner
Net income (loss)
Less: Withdrawals by owner
Owner’s capital, end of period
The balance sheet reports
assets, liabilities, and owner’s equity as of the end of the period.
The balance sheet must _______. The sum of the assets must equal _______________________________.
balance.
the sum of the liabilities plus owner’s equity.
The owner’s ending capital is taken directly from
the statement of owner’s equity.
1The statement of cash flows reports cash flows from three types of activities (___,___,____) during the period. Each category includes both ___ and ___ (negative amounts denoted by parentheses).
operating, investing, and financing activities.
cash receipts and cash payments.