The First Step in Financial Statement Analysis Is to Identify

question 6

Short Answer

The first step in financial statement analysis is to identify the __________________________________________________ of the industry in which a firm participates.

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Definitions:

Periodic Inventory Method

An accounting method which involves physically counting the inventory at specific intervals to determine the cost of goods sold and the ending inventory balance.

Income Summary

An account used in the closing process that aggregates all income and expenses to determine the net income or loss for the period.

Merchandise Inventory

The goods a company has available for sale to customers, considered a current asset on the balance sheet.