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FABM 2 Week 4

This document provides an overview of the key elements included in a statement of comprehensive income (SCI) for a company. It discusses the headings used at the top of the SCI including the company name, statement name, and date. It then outlines the main line items in the body of the SCI, including net sales, cost of goods sold, selling expenses, and general/administrative expenses. For cost of goods sold, it describes the calculations and accounts for beginning inventory, net purchases, freight in, cost of goods available, and ending inventory.

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1K views

FABM 2 Week 4

This document provides an overview of the key elements included in a statement of comprehensive income (SCI) for a company. It discusses the headings used at the top of the SCI including the company name, statement name, and date. It then outlines the main line items in the body of the SCI, including net sales, cost of goods sold, selling expenses, and general/administrative expenses. For cost of goods sold, it describes the calculations and accounts for beginning inventory, net purchases, freight in, cost of goods available, and ending inventory.

Uploaded by

JayMorales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Personal Property of Servitech Institute Asia Inc. Strictly confidential.

Personal Property of Servitech Institute Asia Inc. Strictly confidential.


LESSON 4: STATEMENT OF COMPREHENSIVE INCOME

Heading
- Name of the company
- Name of the statement
-Date of preparation (emphasis on the word “for the” to denote that the statement is only for that
specific period.)

Elements of SCI
1. Net Sales (Sales less Sales returns and Sales discount)

I. Sales – this is the amount of revenue that the company was able to generate from selling
products
II. Sales returns – this account is debited in order to record returns of customers or allowances for
such returns.
III. Sales discount - this is where discounts given to customers who pay early are recorded. Sales
discount is awarded to customers who pay earlier or before the deadline.

2. Cost of Goods Sold – this account represents the actual cost of merchandise that the company was able
to sell during the year. (Haddock, Price, & Farina, 2012)

I. Beginning inventory – this is the amount of inventory at the beginning of the accounting period.
This is also the amount of ending inventory from the previous period.
II. Net Cost of Purchases (Net Purchases + Freight In)
a. Net Purchases = Purchases – (Purchase discount and purchase returns)
b. Purchases – amount of goods bought during the current accounting period
c. Purchase discount – account used to record early payments by the company to the suppliers of
merchandise
d. Purchase returns – account used to record merchandise returned by the company to their
suppliers. (Haddock, Price, & Farina,2012) This is how buyers see a sales return recorded by their supplier
e. Freight In – this account is used to record transportation costs of merchandise purchased by the
company.
III. Cost of Good available for Sale – add Beginning inventory and Net cost of Purchases iv. Ending
inventory – amount of inventory presented in the Statement of Financial Position. This is the total
cost of inventory unsold at the end of the accounting cycle.

3. Selling Expenses – these expenses are those that are directly related to the main purpose of a
merchandising business such as the sale and delivery of merchandise.

4. General and Administrative Expenses – these expenses are not directly related to the
merchandising function of the company but are necessary for the business to operate effectively.
Personal Property of Servitech Institute Asia Inc. Strictly confidential.

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