Concept Introduction:
Adjusting entries are prepared to complete the financial statement of the company and to reflect the accrual method of accounting. Adjusting entries are prepared before issuance of financial statement.
To prepare:
To prepare adjusting
Concept Introduction:
Multiple-step Income statement
Multiple step income statement is one of the format of preparing income statement. Another format of preparing income statement is single step income statement.
Multiple step income statement provides more information than a single step income statement. It involves more than one deduction.
To prepare:
To prepare multiple step income statement.
Concept Introduction:
Single-step Income statement
Single-step income statement is one of the format of preparing income statement. Another format of preparing income statement is multiple- step income statement.
In single step income statement, all the expenses included cost of goods sold is recorded in one column. Expenses are not divided into sub-categories.
To prepare:
To prepare single step income statement.
Concept Introduction:
Current ratio is a ratio which helps to measure the ability of company to pay the obligations of the company. It is calcuated by using following formula
Acid-test ratio
It is a ratio which measures the ability of company to use its short term cash to repay the liabilities immediately. It is calcuated by using following formula
Gross margin ratio
Gross margin ratio assesses the profitability of the company by stating gross margin as a percenatge of sales. It is calculated by usimg following formula-
To Calculate:
To compute current ratio, Acid test ratio, Gross margin ratio.
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Chapter 5 Solutions
FUND.ACCT.PRINC.(LL) 25E <C> W/ CONNECT
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