When preparing financial statements, use the following rules for placing parentheses. o Accounts…

When preparing financial statements, use the following rules for placing parentheses.

o Accounts that are typically added or that can either be added or subtracted to compute net income … use no parentheses when added and parentheses when subtracted.

o Accounts that are typically subtracted to compute net income … use no parentheses when subtracted and parentheses when added. A minus sign may be used instead of parentheses.

Parentheses indicate to (subtract / add / do the opposite of typical).

For example, COGS is typically (added / subtracted) to arrive at net income, and therefore, no parentheses indicate to (add / subtract) the amount.