BU127 Lecture Notes - Lecture 3: Gross Margin, Operating Expense, Canadian Tire
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BU127 Full Course Notes
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Chapter 3: operating decision and the statement of earnings. * turnover rations: measure how long these cycles take. Time period: the long life of a company can be reported over a series of shorter time periods. The statement of earning includes up to three major sections: Results of continuing operations can be presented in one of the two formats: Single step format: list all revenues followed by all expense items and then shows the difference between revenue and expenses, e. g. income tax purposes only, only finds out earnings. Multistep format: costs of goods sold are deducted from sales to present gross margin (gross product) as a subtotal. Other operating expenses are then deducted to show operating earnings (income) as a second subtotal e. g. canadian tire, large merchandisers, how much profit they"re making from each individual sale (can report by nature or by function) Revenues: increases in assets or settlement of liabilities from ongoing operations.