财务会计专业英语课件8

1、Week 9 Assignment for week 8Chapter 4Quiz next weekWeek 9 Assignment for week 8Income StatementP74Income StatementP74elements of financial statementselements of financial statemenOperating section (a) sales or revenue section (b) cost of goods sold section (c) selling expenses (d) administrative or

2、general expensesnon-operating section (a) other revenues and gains (b) other expenses and lossesIncome taxDiscontinued operationsExtraordinary itemsCumulative effect of a change in accounting principleEarnings per shareIncome statement sectionsOperating sectionIncome statem1Which of the following na

3、mes is NOT associated with the income statement? P & L Statement of Financial Position Statement of Operations Statement of earnings 1Which of the following names 2The income statement heading will specify which of the following? a POINT in time a PERIOD of time 2The income statement heading 3Amount

4、s earned by a company in its main operating activities are revenues gains 3Amounts earned by a company i4A company disposes of equipment that it no longer uses in its business. The amount received by the company is more than the amount the asset is carried at in the accounting records. The company w

5、ill report a(n) expense gain loss revenue 4A company disposes of equipme5On December 1 a company borrowed $100,000 at 12% per year. The interest will be paid quarterly, with the first payment due on March 1. What should the company report on its income statement for December?5On December 1 a company

6、 borro6 Is a retailers Interest Expense an operating expense or a non-operating expense? Why is interest expense a non-operating expense?6 Is a retailers Interest Exp7The combination of Selling Expenses and Administrative Expenses is referred to as general expenses operating expenses total expenses

7、7The combination of Selling Ex8Net Sales minus the Cost of Goods Sold equals gross profit income from operations net income 8Net Sales minus the Cost of G9Which basis of accounting best measures profitability during a short time interval? accrual basis cash basis 9Which basis of accounting bes10When

8、 an entire division of a company is eliminated, it is referred to as a(n) discontinued operation extraordinary item change in accounting principle 10When an entire division of a The discontinued operations section is the first irregular item in a properly prepared income statement. This section indi

9、cates units or businesses a company sold, or discontinued, over the period under review. For example, a company with a 30 percent effective tax rate sells a profitable unit and reaps a $1 million gain through the deal. At the end of the year, the business would report net income from discontinued op

10、erations amounting to $700,000 ($1 million minus a transactional tax charge of $300,000, or $1 million times 30 percent). Discontinued Operations The discontinued operat11A gain or loss that is unusual in nature and infrequent in occurrence is a(n) discontinued operation extraordinary item change in

11、 accounting principle 11A gain or loss that is unusu In accounting terminology, an extraordinary item is an event that is both unusual in nature and infrequent in occurrence. Examples include snow in sub-Saharan Africa, political expropriations in a country with a long tradition of democracy and res

12、pect of private property, and an earthquake in a region that has not encountered geological misfortune in the last 300 years. Economic events that are unusual in nature or infrequent in occurrence do not qualify as extraordinary items and usually end up in the regular items section of an income stat

13、ement.Extraordinary Items In accounting terminologExtraordinary items are very rare. A recent issue of Accounting Trends & Techniques published by the AICPA showed that of the 500 financial reports surveyed in 2009 there were only 3 extraordinary items reported. In 2008 there were 2 extraordinary it

14、ems reported in the 500 financial reports surveyed. In 2007 and 2006 there were 4 extraordinary items presented in each of the years 600 financial reports. In other words, over the four-year period only 0.6% of the 2,200 financial reports surveyed had presented extraordinary items.Extraordinary item

15、s are very r12When a company changes its book depreciation from an accelerated method to the straight-line method, it is considered to be a(n) discontinued operation extraordinary item change in accounting principle 12When a company changes its b As irregular items, cumulative effects of accounting

16、changes pertain to accounting adjustments a business makes to factor in financial reporting modifications in prior performance data. These adjustments do not call for any monetary transaction - meaning, the company does not pay for any expense that results from these changes. For example, if a Mexic

17、o City-based organization changes its accounting principles from Mexican generally accepted accounting principles to American GAAP, the business would record the cumulative effects of such a change in its income statement.Cumulative Effects of Accounting Changes As irregular items, cumDiscontinued O

18、perationsExtraordinary Itemsfurther reading for chapter 4Discontinued Operationsfurther13If a companys stock is publicly traded, is it a requirement that the earnings per share appear on the income statement? Yes No 13If a companys stock is publ14Are the notes to the financial statements considered

19、to be an integral part of the financial statements? Yes No 14Are the notes to the financi15Is it acceptable that some of the expenses reported on the income statement be estimates? Yes No 15Is it acceptable that some oCappuMania Pty Ltdfor the year ended 31 March 1998 $Retained profits, beginning of

20、 year 4 400Add net profit for the year 14 810 19 210Deduct dividend declared during the year 1 000Retained profits, end of year 18 210Statement of retained profitsCappuMania Pty Ltd Is a loans principal payment included on the income statement?If we dispose of an asset, will there be a change in the

21、 owners equity?Oral practice Oral practice Recognition of revenue or expense at the same time as cash inflow or outflowA retail shop records a cash sale to a customer.An investor records a dividend cheque received form BHP.A company pays Acme Rug Cleaners to shampoo the carpets inits customer waitin

22、g area.A company makes a donation to the accounting department of the local university to support teaching and research.practice IRecognition of revenue or expeRecognition of revenue or expense prior to cash flow A lawyer performs services for a client in June, and bills the client $500 to be paid w

23、ithin thirty days.A company receives a $2400 advertising bill on 10 June payable in thirty days.A manufacturer estimates that it will incur future warranty costs of $3000 in the 2008 financial year on products sold during the 2007 financial year.On 30 June 2014 a company calculates that its 2014 inc

24、ome taxes are $xxx. the company must pay the taxes by 15 March 2015.The lawyer receives full payment from her client in July.The advertising expense is paid on 10 July.practice IIRecognition of revenue or expeCash collections or payments related to previously recognised revenues and expensesThe lawy

25、er receives full payment from her client in July.The advertising expense is paid on 10 July.The manufacturer makes payments under the warranty during the 2008 financial year.The company mails it scheque to the Australian Taxation Office on 10 March 2015.practice IIICash collections or payments rCash

26、 flow prior to revenue and expense recognitionA lawyer receives an advance of $2500 from a client for future services.In June 2007, Dogwood Limited pays $400 for a one-year fire insurance policy that becomes effective 1 July 2007.In July 2007, Gogwood Limited purchases, for $40,000 in cash, a new bu

27、ilding to be used as a retail location. Dogwood estimates that the building will be useful for ten years.Dogwood Limited purchases $5000 worth of stereo components from a supplier for cash. Dogwood intends to resell these items to its customers.practice IVCash flow prior to revenue andRecognition of

28、 revenue or expense subsequent to cash flow The lawyer completes the work promised for the client.The fire insurance policy expires in June 2008. Dogwood recognises a portion of the cost of the building as an operating expense.Dogwood sells all of the stereo components to customers.practice VRecognition of revenue or expeExpiration of assetsExample AOn 1 June a company pays $24,000 for a one-year insurance policy.At 30 June on-twelfth of the asset would be used up.Example B1. On 3 June a company purchases supplies costing $10,000 which they pay cash for.2. At 30 June