1SOL4.0 - revenues and costs are normal and likely to occur...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Valencia Community College Activity 4.0 Solution – Battiste 3. Financial statement articulation is a term that means that an amount reported on one financial statement will reconcile to the same amount reported on another financial statement. For example, the ending cash balance reported on the balance sheet must equal the ending cash balance reported on the statement of cash flows. The net income or net loss at the bottom of the income statement must agree to the same number shown on the statement of changes to owner’s equity. The ending balance of owner’s equity on the statement of changes to owner’s equity will also be reported on the balance sheet. 6. The people who examine the income statement are evaluating revenue and profit ability and growth rates. By segregating revenues and expenses into operating and nonoperating sections the accountants are giving the reader information about which
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: revenues and costs are normal and likely to occur again in future periods. In other words, which costs and revenues are sustainable and which are one time or unusual in nature. Examples of nonoperating items include loss from earthquakes, selling an old truck and having a gain on the sale and interest expense and theft. No, the gross margin and the operating margin are clearly not the same thing. The gross margin is revenues minus cost of goods sold. Operating margin, on the other hand, is revenues minus cost of goods sold, minus all the other operating expenses. 9. Net Revenues increased $61,601, or 44%, to $202,310 in 2010 from $140,709 in 2009. This increase was the result of increases in the women’s and youth categories primarily and a 67% change in License revenues. 10. Yes, sports drinks are now 22% of total sales up from 20%....
View Full Document

Ask a homework question - tutors are online