BUS-A 100 Lecture Notes - Lecture 5: Accounts Payable, Financial Statement, Accounts Receivable
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BUS-A 100 Full Course Notes
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Understand the concept of cost of goods sold and gross profit. Know the two entries required when a company sells an item of inventory. Understand how a gain or loss on sale of an investment is shown on the income statement. Know the entry required when a company has a gain or loss on sale of an investment. The income statement that we covered earlier was in its most basic form: This is the format for income statements used by companies in the service industry. Companies that sell their knowledge and abilities are considered in the service industry. Examples of these companies are consulting firms of all types, doctors" offices, lawyers, accountants, etc. Companies that sell a product present a slightly different income statement. For these companies it is helpful to offer the reader of the financial statements a little more information. Companies that sell a product include retailers, wholesalers, and manufacturing firms.
