1.Another name for the income statement is the statement of financial position.
2.The difference between the selling price of goods sold to customers during a period and the cost of the goods sold is gross profit.
3.The excess of gross profit over operating expenses is income from operations.
4.Comparative financial statements report the combined economic activities of two or more corporations owned by the same stockholders.
5.Period costs are costs directly associated with specific goods.
6.Earnings per share is computed by dividing income from operations by the average number of common shares outstanding during a fiscal period.
7.Plant assets are cash or other resources expected to be converted to cash or consumed during the next fiscal year.
8.Long-term legal rights resulting from the ownership of patents and similar items are known as intangible assets.
9.Working capital is the difference between current assets and current liabilities.
10.The two major divisions of stockholders' equity are contributed capital and retained earnings.
11.Financial Statements have limitations that affect the usefulness of the information the statements report.
12.Generally Accepted Accounting Principles (GAAP) prohibits the use of estimates in preparing financial statements.