Investigating Financial Statements
• Income Statement o Discounts are deducted from gross revenues to arrive at net revenues o Moving down the stairs there are various kinds of expenses. Next line usually is cost of sales and various departmental expenses. o This number tells you the amount of money the company spent to produce the goods or services
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Investigating Financial Statements
• Income Statement o Operating expenses are expenses that support a company’s operations for a give time frame. o Examples includes administrative salaries, marketing expenses, rent, and maintenance. o Operating expenses cannot be linked directly to the products and services sold by the company o Depreciation Expense/Matching Principal
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