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(WIP) ACC 350 Exam 1 Study Material

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Pg. 10 Sarah Allison

Pg. 10 Sarah Allison Takash ACC 350, Spring 2018 Exam 1 Study Material 16. Income Statement Quick Facts a. Is ​comparative​ - meaning it represents changes over a period rather than depicting a single point in time b. Facilitates ​determination or prediction​ of i. profitability ii. investment value iii. creditworthiness iv. risk v. Amounts, timing and uncertainties of future cash flows c. Method of income statement measurement = transaction approach i. Focuses on income-related activities that occurred in the period ii. Can further ​classify income by categories​, such as: 1. Customer 2. Product line 3. Function 4. Operating & non-operating 5. Continuing & discontinued 6. Regular & non recurring iii. Major elements: 1. Revenues a. Inflows or enhancements of assets b. Examples: i. Sales ii. Fees iii. Interest received iv. Dividends received 2. Expenses a. Outflows or using up of assets b. Examples: i. COGS ii. Depreciation iii. Rent paid iv. Interest paid v. Wages paid

Pg. 11 Sarah Allison Takash ACC 350, Spring 2018 Exam 1 Study Material 3. Gaines a. Increases in equity (net assets) that result from peripheral or incidental transactions 4. Losses a. Decreases in equity (net assets) that result from peripheral or incidental transactions 17. Multi-step Income Statement a. Is a common format of income statement b. Sections summarized below: c. Example multi-step income statement (below):