QUESTIONS AND SOLUTIONS 2026
◉ income statement. Answer: revenue
expense
gains/losses
gross profit
net income/loss
◉ statement of retained earning. Answer: beginning capital
contributed capital
ending capital
◉ statement of cash flow. Answer: listing of cash inflows/outflows
operating
investing
financing
◉ steps in accounting cycle. Answer: identity
journalize
communicate
, ◉ cost principle. Answer: record at cost
◉ revenue recognition. Answer: revenue recognized when earned
◉ matching principle. Answer: expenses and related revenue
recorded in the same period
◉ adjusting entries. Answer: depreciation
accruals interest/revenue
prepaid
◉ LIFO. Answer: last in first out
◉ FIFO. Answer: first in first out
◉ cost of goods sold. Answer: beginning inventory plus net
purchases minus ending inventory
◉ gross profit. Answer: sales minus cost of goods sold
◉ perpetual. Answer: ongoing