I have a couple of questions. PLEASE answer thoroughly and explain.1) Are all types of revenue accounts listed on the Income Statement only? And are they always temporary accounts with a credit balance? Do ALL of them affect only RE or do revenues affect other statements and accounts. If so what are they and how do they affect them?2) What role does Cost of Goods Sold play? What is it and why is it listed under Sales and Labor Revenue and deducted from Sales and Labor Revenue? Will there always be a Cost of Goods Sold on the Income Statement. How do you arrive at Gross Profit on the Income Statement if there is not a Cost of Goods Sold? What other accounts if any does Cost of Goods Sold affect? Can you give me an example of Cost of Goods Sold?3) Do expenses like revenues appear only on the Income Statement? What other accounts do they affect, if any? Are they credit balances as well? . Do expenses affect only the RE and are they debited or credited to RE?3)How do you calculate Net Income? Income Statements show Net Income Before Taxes followed by Net Income. So how do you find out what the Income taxes would be to add to Net Income?

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Asked Feb 12, 2019
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I have a couple of questions. PLEASE answer thoroughly and explain.

1) Are all types of revenue accounts listed on the Income Statement only? And are they always temporary accounts with a credit balance? Do ALL of them affect only RE or do revenues affect other statements and accounts. If so what are they and how do they affect them?
2) What role does Cost of Goods Sold play? What is it and why is it listed under Sales and Labor Revenue and deducted from Sales and Labor Revenue? Will there always be a Cost of Goods Sold on the Income Statement. How do you arrive at Gross Profit on the Income Statement if there is not a Cost of Goods Sold? What other accounts if any does Cost of Goods Sold affect? Can you give me an example of Cost of Goods Sold?

3) Do expenses like revenues appear only on the Income Statement? What other accounts do they affect, if any? Are they credit balances as well? . Do expenses affect only the RE and are they debited or credited to RE?
3)How do you calculate Net Income? Income Statements show Net Income Before Taxes followed by Net Income. So how do you find out what the Income taxes would be to add to Net Income?

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Expert Answer

Step 1

Dear student, as you have not mentioned the question number to be answered, so we are answering the first question for you as we can answer one question at a time. If you need help for other questions too, then please repost the questions separately.

Step 2

Meaning of revenue : Revenue is the normal income which is normally earned by the company during the year.

Yes, in income statements it will show full year expenses and sale only.

Step 3

Yes, since these accounts are temporary nature accounts, their balance must be transferred to retain earning or the proprietor\'s capital accounts at the end of each accounting year. Contra assets accounts, these are permanent account...

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