The Explanation of Why the Net Income Differs from the Change

question 139

Multiple Choice

The explanation of why the net income differs from the change in cash balance for the period is explained in the ________.

• A)income statement
• B)balance sheet
• C)statement of owner's equity
• D)statement of cash flows

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Definitions:

Cost Of Merchandise

The purchase price of goods sold by a company, including the cost of acquiring the goods plus any additional expenses to bring them to saleable condition.

Freight In

The cost associated with transporting goods into a business, typically included in the cost of goods sold calculation.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from the revenue generated from sales.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, preparing the accounts for the next period.