Flashcards Becker U1 P1

U1 A.1. Financial Statements: Part 1 Question How is gross margin calculated? Answer © Becker Professional Education. All rights reserved. U1 A.1. Financial Statements: Part 1 Question Who are the primary users of general purpose financial reports? Answer Existing and potential: Investors Lenders Other creditors © Becker Professional Education. All rights reserved. U1 Page 2 of 59 FC-01519 CSO: 1A1a LOS: 1A1e #4 FC-01518 CSO: 1A1a LOS: 1A1e #3 1. 2. 3. 4. 1. 2. 3. 4. U1 A.1. Financial Statements: Part 1 Question Name the expense that each of the following unexpired costs turn into as they expire: Inventory Unexpired (prepaid) cost of insurance Net book value of fixed assets Unexpired cost of patents Answer Cost of goods sold Insurance expense Depreciation expense Amortization expense © Becker Professional Education. All rights reserved. U1 A.1. Financial Statements: Part 1 Question Are gains and losses on the disposal of assets shown on a "gross basis" (i.e., where both the sale proceeds and the net book value of the disposed asset are reported) or on the "net basis" (i.e., where only the difference between the sale price and the net book value of the disposed asset is reported)? Answer Gains and losses are reported at their net amounts (i.e., proceeds less net book value). © Becker Professional Education. All rights reserved. U1 Page 3 of 59 FC-01521 CSO: 1A1a LOS: 1A1g #6 FC-01520 CSO: 1A1a LOS: 1A1g #5 U1 A.1. Financial Statements: Part 1 Question How does a "multiple-step" income statement differ from a "single-step" income statement? Answer A multiple-step income statement reports operating revenues and expenses separately from nonoperating revenues and expenses and other gains and losses. On a single-step income statement's presentation of income from continuing operations, total expenses are subtracted from total revenues without separation between operating and nonoperating revenues and expenses. © Becker Professional Education. All rights reserved. U1 A.1. Financial Statements: Part 1 Question What is meant by a "classified" balance sheet? Answer A classified balance sheet distinguishes current and noncurrent assets and liabilities