Ch. 15 Financial Statements for a Corporation

•Financial statements provide the primary source of information needed by owners and managers to make decisions on the future activity of a business.

•Adequate Disclosure Concept Pg. 446

•Compare financial condition and progress from one fiscal period to the next.

Corporation’s Statements

• Income Statement

• Balance Sheet

• Statement of Stockholder’s Equity

For your reading pleasure…

• Read about Ken Harrison on Page 447!

300 Madison Avenue24th Floor

New York, NY 10017United States

Founded in 1849Phone:

646-471-4000Fax:

646-471-4444www.pwc.com

Income Statement Stats

• What is reported?– Revenue– Cost of Merchandise Sold– Gross Profit on Sales– Expenses– Net Income

Go to this site…

• http://www.accountingunplugged.com/2008/09/05/financial-statements-income-statement/

• Read up on the Income Statement details and example and answer the questions on the next slides on lined paper. Use complete sentences by rephrasing the ? in your answer.

Questions about Income Statement

1. Explain the Matching Principle

2. What is another name for the Income Statement?

3. What timeframe does the I.S. provide financial data for?

4. What are the I.S. Accounting Types? (List them)

5. Write out the format for the I.S.

More Questions…Yipee!

6. What relationship does Gross Margin show?

7. Our book calls Gross Margin by another name, what is it?

8. How is the Gross Margin % calculated?

9. What does the G.M. % tell you?

10.What is “other revenue?”

Final Questions…

11.What happens to the I.S. account balance at the end of the year?

12.Describe one new thing you learned today!