Income Statement Review

The income statement equation is assets - liabilities = owner's equity.

• True

• False

Cost of goods sold are the indirect costs associated with producing a product for sale.

• True

• False

The formula for cost of goods sold is Beginning Inventory + Purchases - Ending Inventory = COGS for that period.

• True

• False

Financial statements for a group that are presented as one

• Balance Sheet

• Consolidated Income Statement

• Consolidated Balance Sheet

• Cash Flow Statement

Comparative analysis is also known as

• Vertical Analysis

• Horizontal Analysis

• Common Size Analysis

• None of the answers are correct

Horizontal analysis allows you to compare to periods of data

• True

• False

Vertical analysis compares all items on an income statement to revenues.

• True

• False