Podcast Beta
Questions and Answers
Which one of these is true about the fiscal year?
What is the definition of revenue?
What is the cost of goods sold?
Which of the following is a requirement for revenues to be recognized under accrual basis?
Signup and view all the answers
What is the purpose of the matching method in recognizing revenues?
Signup and view all the answers
What is the net income on an income statement?
Signup and view all the answers
Where are cash dividends recorded in financial statements?
Signup and view all the answers
Study Notes
Fiscal Year
- A fiscal year is a 12-month period used for budgeting, forecasting, and financial reporting.
Revenue
- Revenue is the income generated from a company's sales of goods or services.
Cost of Goods Sold
- Cost of Goods Sold (COGS) is the direct cost of producing and selling a company's products or services.
Revenue Recognition
- Under accrual basis, revenues are recognized when they are earned, regardless of when cash is received.
- A requirement for revenue recognition is that the revenues must be earned and realizable.
Matching Principle
- The matching principle is an accounting principle that requires revenues to be matched with the expenses incurred to generate those revenues.
Net Income
- Net income is the income earned by a company, calculated by subtracting total expenses from total revenues.
Cash Dividends
- Cash dividends are recorded as a reduction in retained earnings on the balance sheet, not as an expense on the income statement.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on revenues and expenses in the context of interim financial statements. Learn about how companies measure income, define the fiscal year, and prepare financial statements for interim periods.
