Management uses gross profit as a measure for how effectively the business is performing in its primary functions of buying and selling merchandise.

The difference between an asset's account balance and its related contra account balance is known as its book value

The amount of dividends paid during the year is presented on the income statement.

Some management decisions can best be made after the amount of assets, liabilities, and stockholders' equity in the business is determined.

Interest Income is reported on the income statement in a section labeled Other Revenue.

Reporting financial information in the same way from one fiscal period to the next is an application of the accounting concept Adequate Disclosure.

Operating Revenue less cost of merchandise sold equals net income.

Total operating expenses on an income statement are deducted from gross profit to find income from operations.

When a business's expenses are less than the gross profit, the difference is known as a net loss.

Increasing sales revenue while keeping cost of merchandise sold the same will increase gross profit.

All the information required to prepare a statement of stockholders' equity is obtained from the income statement and the adjusted trial balance.

When more detailed information about an item on a financial statement is needed, a supporting schedule may be prepared.

A statement of stockholders' equity summarizes the changes in owners' equity during a fiscal period.

Interest earned on notes receivable is reported in the Operating Revenue section of an income statement.

Beginning merchandise inventory less purchases made during the fiscal period plus ending inventory equals cost of merchandise sold.

On an income statement, vertical analysis percentages are calculated by dividing the amount on each line by the amount of operating income.

A major difference between balance sheets of a corporation and a proprietorship is the owners' equity section.

A business owning both current and plant assets usually lists them under one heading on a balance sheet.

A corporation's balance sheet reports assets, liabilities, and stockholders' equity on a specific date.

Some income may be distributed as dividends to provide stockholders with a return on their investments.

Financial statements provide the primary source of information needed by owners and managers to make decisions on the future activity of a business.

An income statement is used to report a business's financial progress.

An income statement has three main sections for _____.

The total original price of all merchandise sold during a fiscal period is _____.

Cost of merchandise sold is found by taking the amount of beginning merchandise inventory _____.

Total sales less sales discount and sales returns and allowances is called _____.

A financial statement that summarizes the changes in a corporation's ownership for a fiscal period is _____.

A financial statement that reports a corporation's assets, liabilities, and stockholders's equity on a specific date is _____.

Liabilities owed for more than a year are called _____.

An asset's book value is reported on a balance sheet by listing _____.

On an income statement, merchandising businesses report _____.

The operating revenue remaining after cost of merchandise sold has been deducted is

The income from operations is calculated by subtracting operating expenses from

One way to increase gross profit is to

A financial statement that reports the amount of dividends is

The financial statement that reports the par value of the stock is

Preparing financial statements that provide information about a business's financial condition, changes in this financial condition, and the progress of operations is an application of the accounting concept

In the accounting cycle, closing entries are journalized and posted