| A | B |
|---|
| net sales | total sales less sales discount and sales returns and allowances |
| cost of merchandise sold | the orginal price of all merchandise sold during a fiscal period |
| gross profit on sales | the revenue remaining after cost of merchandise sold has been deducted |
| financial ratio | a comparison between two items of financial information |
| earnings per share | the amount of net income after federal income tax belonging to a single share of stock |
| price earnings ratio | the relationship between the market value per share and earnings per share of a stock |
| statement of stockholder's equity | a financial statement that shows changes in a corporation's ownerhsip for a fiscal period |
| par value | a value assigned to a share of stock and printed on the stock certificate |
| current liabilities | liabilities due within a short time, usually within a year |
| long-term liabilities | liabilities owed for more than one year--mortgage payable |
| major difference between an income statement for a merchandising business and a corporation is the | cost of merchandise sold section |
| Cost of Merchandise Sold is calculated by | Taking beginning inventory and adding purchase and subtracting ending inventory |
| For a merchandising business every sales dollar includes what four components | cost of merchandise sold, gross profit on sales, total expenses, and net income |
| How does a company determine acceptable component percentages | compares with previous fiscal periods as well as with industry standards that are published by industry organizations |
| What is the result if the total expenses are greater than the gross profit on sales? | net loss |
| What is the result if the gross profit on sales is greater than the total expenses? | net income |
| What financial information does a statement of stockholder's equity report? | changes in owner's equity for a fiscal period |
| What are the two major sections of a statement of stockholder's equity? | Capital Stock and Retained Earnings |
| Where is the information found to prepare the capital stock section of a statement of stockholder's equity | In the Capital Stock general ledger account |
| Where is the beginning balance of retained earnings found? | In the Balance Sheet Credit column of a work sheet |
| How does a corporation distribute a portion of income to stockholders? | As a dividend |
| Where is the amount of dividends found? | In the Balance Sheet Debit column of a work sheet |
| In what two sections does a typical corporation classify its assets | Current and Plant Assets |
| What items are listed on the balance sheet for an account having a related contra asset account? | The balance of the asset account, the balance of the asset's contra account, the book value |
| What is an example of long-term liability? | Mortgage Payable |
| Where are the amounts obtained for the stockholder's equity section of the balance sheet? | From the Statement of Stockholder's Equity |
| What are the two supporting schedules that might accompany a balance sheet? | Schedule of Accounts Payable and Schedule of Accounts Receivable |
