ACCOUNTING CRASH COURSE - WALL STREET PREP
QUESTIONS AND COMPLETE SOLUTIONS UPDATED AND
VERIFEID
Net Revenues
-Total dollar payment for goods and services that are credited to an income statement
over a particular time period
Cost of Goods Sold (COGS)
-represents a company's direct cost of manufacture or procurement of. a good or
service that the company sells to generate revenue.
Gross Profit
Revenues - Cost of Goods Sold (COGS)
Selling, General & Administrative (SG&A)
-Operating costs not directly associated with the production or procurement of the
product or service that the company sells to generate revenue.
tied up with the selling of the business
Ex.) Payroll, wages, commissions, meal and travel expenses, advertising, and
marketing expenses.
Research & Development (R&D)
-A company's activities that are directed at developing new products or procedures
-include compensation for employees, equipment, and facilities engaged in the R&D
process.
EBITDA
-Earnings before interest, taxes, depreciation & amortization: Gross Profit - SG&A -
R&D
, -Popular measure of a company's financial performance
Depreciation & Amortization (D & A)
-The allocation of cost over a fixed asset's useful life in order to match the timing of the
cost of the asset with when it is expected to generate revenue benefits
Other Operating Expenses / Income
-Any operating expenses not allocated to COGS, SG&A, R&D, D&A
Operating Profit (EBIT)
-Earnings before interest & taxes: EBITDA - D&A
Interest Expense
-the amount/payments the company has to pay on debt owned/outstanding debt.
Interest Income
-A company's income from its cash holdings and investments (stocks, bonds, and
savings accounts)
-Often presented on the Income Statement as Net Interest Expense.
Non-operating items
-Items peripheral to core operations.
-Includes gains/losses on investments and revaluation of certain financial assets and
debt obligations.
Income Tax Expense
-The tax liability a company reports on the income statement
Net Income
-EBIT - Net Interest Expense - Other Non-operating Income - Taxes
Basic Earnings per share (EPS)
-Net income / Basic Weighted Average Shares Outstanding
Diluted EPS
-Net income / Diluted Weighted Average share outstanding
Not all income is revenue
QUESTIONS AND COMPLETE SOLUTIONS UPDATED AND
VERIFEID
Net Revenues
-Total dollar payment for goods and services that are credited to an income statement
over a particular time period
Cost of Goods Sold (COGS)
-represents a company's direct cost of manufacture or procurement of. a good or
service that the company sells to generate revenue.
Gross Profit
Revenues - Cost of Goods Sold (COGS)
Selling, General & Administrative (SG&A)
-Operating costs not directly associated with the production or procurement of the
product or service that the company sells to generate revenue.
tied up with the selling of the business
Ex.) Payroll, wages, commissions, meal and travel expenses, advertising, and
marketing expenses.
Research & Development (R&D)
-A company's activities that are directed at developing new products or procedures
-include compensation for employees, equipment, and facilities engaged in the R&D
process.
EBITDA
-Earnings before interest, taxes, depreciation & amortization: Gross Profit - SG&A -
R&D
, -Popular measure of a company's financial performance
Depreciation & Amortization (D & A)
-The allocation of cost over a fixed asset's useful life in order to match the timing of the
cost of the asset with when it is expected to generate revenue benefits
Other Operating Expenses / Income
-Any operating expenses not allocated to COGS, SG&A, R&D, D&A
Operating Profit (EBIT)
-Earnings before interest & taxes: EBITDA - D&A
Interest Expense
-the amount/payments the company has to pay on debt owned/outstanding debt.
Interest Income
-A company's income from its cash holdings and investments (stocks, bonds, and
savings accounts)
-Often presented on the Income Statement as Net Interest Expense.
Non-operating items
-Items peripheral to core operations.
-Includes gains/losses on investments and revaluation of certain financial assets and
debt obligations.
Income Tax Expense
-The tax liability a company reports on the income statement
Net Income
-EBIT - Net Interest Expense - Other Non-operating Income - Taxes
Basic Earnings per share (EPS)
-Net income / Basic Weighted Average Shares Outstanding
Diluted EPS
-Net income / Diluted Weighted Average share outstanding
Not all income is revenue
