When Preparing the Financial Statements from a Spreadsheet That Shows

question 37

Multiple Choice

When preparing the financial statements from a spreadsheet that shows the results of a transaction analysis:

• A)a statement of retained earnings is not required.
• B)the balance sheet reports the beginning balance of retained earnings.
• C)assets,liabilities,and stockholders' equity are reported on the balance sheet.
• D)revenues,expenses,and dividends are reported on the income statement.

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Definitions:

Discontinued Operation

A business segment that has been sold, abandoned, or otherwise discontinued, and is reported separately in financial statements.

Income Statement

A financial statement detailing a company's revenues, expenses, and profits over a specific period, often quarterly or annually.

Operating Expense

This refers to the costs associated with running a business's day-to-day operations, excluding costs linked to production.

Tax Effect

The impact of a company's tax obligations on its financial statements, including how taxes affect the overall expenses and net income.