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Ch 4 Study Sheet

Ch 4 Study Sheet - 2 Provide a basis for predicting future...

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ACCTG 471 Chapter 4 Income Statement: The report that measures the success of company operations for a given period of time. The business and investment community uses the income statement to determine profitability, investment value, and creditworthiness. It provides investors and creditors with information that helps them predict the amounts, timing and uncertainty of future cash flows. Functions of the Income Statement1) Evaluate the past performance of the company
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Unformatted text preview: 2) Provide a basis for predicting future performance 3) Help assess the risk or uncertainty of achieving future cash flows Earnings Management: The planned timing of revenues, expenses, gains and losses to smooth out bumps in earnings. Multiple-Step Income Statement: 1) Separates operating and non-operating activities of the company. 2) A classification of expenses by functions, such as merchandising (COGS) and administration. *For layout see pg 131...
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