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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