Income Statement Practice Problems

Balance sheet income statement practice questions.

Income statement practice problems. When you have completed the practice exam a. Balance sheet and income statement relationship. Interpreting the balance sheet. Had the following transactions occur during the month of january.

Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc. The following trial balance is prepared after preparation of income statement for f. Prepare balance sheet for f. This is the currently selected item.

1 customers paid the company 600 000 for one year of legal service to be earned equally over the year. Practice problem 1 income statement reporting revenues and expenses prepaid legal inc. A multi step income statement contains four measures of profitability and a single step income statement contains one measure of profitability. Had the following transactions occur during the month of january.

In the absence of information about the date of repayment of a liability then it may be assumed. Interpreting the income statement. Practice problem 1 income statement reporting revenues and expenses prepaid legal inc. The income statement format above is a basic one what is known as a single step income statement meaning just one category of income and one category of expenses and prepared specifically for a service business.

1 customers paid the company 600 000 for one year of legal service to be earned equally over the year. Is a retailer s interest expense an operating expense or a non operating expense. Our quiz and worksheet is made up of questions on the operations of an income statement that you can access from any mobile device or computer at your leisure. Basic cash flow statement.

100 000 x 12 x 1 12 1 000. Green as at 31 march 2015. Preparation of balance sheet horizontal and vertical style. Get income statement problems and solutions from the pros.

Practice questions multiple choice identify the choice that best completes the statement or answers the question. One solution to these problems is to review income statement practice problems so that you ll familiarize yourself with various scenarios when handling a business statements. The income statement must report the interest incurred regardless of the date the interest is paid.