ACCT 105 APUS Classified Income Statement Responses

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In need of a 125 response/discussion to EACH of the following forum posts. There are (2) different Forum posts. Agreement/disagreement/and/or continuing the discussion. The two interactive posts should each be substantial, relevant, and engaging. Replies to classmates should include direct questions. In-text citations and references may be in APA format. Original forums discussion/topic post is as follows: (Use/Cite references to support your ideas)

Chapters 7 and 8 of the textbook have been used this week.

FORUM POST 1: Describe a classified income statement. Be sure to address the classified income statement’s four sections and the important financial relationships found within the statement.

Good
morning,

For
this week I have chosen to answer and discuss question one. A classified income
statement is a statement that displays expenses and revenues. It also goes
further by breaking these two things into four sections. The four sections on a
classified income statement are operating revenues, cost of goods sold,
operating expenses and nonoperating revenues. Operating revenue is any
gains made off of a sold product or service. Cost of good sold is the expenses
acquired by buying material or labor expenses to operate the business.
Operating expenses would include items like insurance, rent, utilities, or
legal services. Nonoperating revenues are expenses that are not related to the
business, like taxes.

FORUM POST 2: Describe a classified income statement. Be sure to address the classified income statement’s four sections and the important financial relationships found within the statement.

Hello Class,

A classified income statement “shows important relationships that help in analyzing how well the company is performing” (Roger Hermanson 2011). It breaks down the complex statement making it easier for users to understand and see how much it costs to sell a product versus, what is spent in running the business. A classified statement has four major sections, operating revenues, costs of goods sold, operating expenses and nonoperating revenues and expenses (other revenues and other expenses). Operating revenues is income made by the major activities of a business. Costs of goods sold show what it cost to sell products to the customer. The cost of goods sold equation is broken down as, beginning inventory + net cost of purchases – ending inventory = costs of goods sold. Operating expenses are normal business function expenses besides cost of goods sold. Nonoperating revenues and expenses are all other revenues and expenses not related to the sale of products.
Capitalism is defined as “ an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state” (Oxford Languages). In laymen’s terms, any individual can own or sell property or businesses not just the government, or state.
There are four recognized inventory valuation methods, specific identification, which links actual costs to an identifiable unit of product. There is first in first out (FIFO), have a higher ending inventory, due to its higher gross income and higher taxable income. Last in first out (LIFO) treat cost of goods sold as an expense and are subtracted from the income statement. The final method, is the weighted average method. A company divides the cost of goods sold by the number of products available to be sold.
A chosen inventory valuation method could effect companies based on price sensitive products and that customer base for the product. Certain methods may force a company to higher or lower the price based on certain competition and strategy.

Hermanson, Roger H., Maher, Michael W., Edwards, James Don (2011) Accounting Principles: A Business Perspective, Financial Accounting (Chapter 8) Textbook