Chapter 7 Accounting Test

The date on a monthly income statement prepared on July 31 is written as __.

For Month Ended July 31, 20--

Information needed to prepare a balance sheet liabilities section is obtained from a work sheet's Account Title column and __.

Balance Sheet Credit column

Information needed to prepare a balance sheet assets section is obtained from a work sheet's Account Title column and __.

Balance Sheet Debit column

The sections of an income statement are __.

heading, revenue, expenses, and net income or net loss

The amount of net income calculated on an income statement is correct if __.

it is the same as net income shown on the work sheet

The formula for calculating the net income component percentage is __.

net income divided by total sales equals net income component percentage

An income statement reports a business's financial __.

progress over a specific period of time

When preparing a balance sheet, the amount of owner's capital is calculated using amounts obtained from __.

the work sheet's Balance Sheet columns

The formula for calculating the total expenses component percentage is __.

total expenses divided by total sales equals total expense component percentage

Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept __.

Accounting Period Cycle

Assuring that financial statements contain all information necessary to understand a business's financial condition is an application of the accounting concept __.

Adequate Disclosure

Information needed to prepare an income statement's revenue section is obtained from a work sheet's Account Title column and __.

Income Statement Credit column

Information needed to prepare an income statement's expense section is obtained from a work sheet's Account Title column and __.

Income Statement Debit column

The percentage relationship between one financial statement item and the total that includes that item is __.

a component percentage

A balance sheet reports a business's financial __.

condition on a specific date