Understanding Comprehensive Income Statements

To calculate the company's tax liability

To provide a summary of a company's financial performance over a specific period

To list all assets and liabilities of a company

To track cash flow movements

Depreciation

Revenue

Accruals

Prepayments

Revenue - Expenses

Opening inventories + Purchases - Closing inventories

Total assets - Total liabilities

Gross profit - Operating expenses

Reducing balance method

Straight-line method

Double declining balance method

Units of production method

It increases revenue

It decreases expenses

It increases expenses

It has no effect

Sales revenue

Interest received

Cost of goods sold

Depreciation

They are added to expenses

They are subtracted from expenses

They are added to revenue

They are subtracted from revenue

Gross profit - Operating expenses + Other income

Revenue - Cost of goods sold

Total assets - Total liabilities

Opening inventories + Purchases - Closing inventories

It results in a constant depreciation expense each year

It results in a decreasing depreciation expense over time

It results in an increasing depreciation expense over time

It does not account for asset usage

To determine the company's cash flow

To assess the company's profitability and financial performance

To calculate the company's tax liability

To list all assets and liabilities