Chapter 9 - Financial Statements for a Sole Proprietorship

Liquidity Ratio

A ___________ is a measure of a business's ability to pay its current debts as they become due and to provide for unexpected needs of cash

Balance Sheet

A financial statement that is a report of the final balances in all asset, liability, and owner's equity accounts at the end of the fiscal period is the

Statement of Changes in Owner's Equity

A financial statement that is prepared to summarize the effects on the capital account of the various business transactions that occurred during the fiscal period is called a

Current Assets

Are the assets used up or converted to cash during the normal operating cycle of the business

Current Liabilities

Are the debts of the business that must be paid within the next accounting period

Profitability Ratios

Are used to evaluate the earnings performance of the business during the accounting period

Net Income

Occurs when total revenue is greater than total expenses

Financial Statements

Reports prepared to summarize the changes resulting from business transactions that have occurred during a fiscal period are caled

Return on Sales

The ____________ ratio is used to examine the portion of each sales dollar that represents profit

Current Ratio

The _____________ is the relationship between current assets and current liabilities

Report Form

The classifications of balance sheet accounts are shown one under the other in the

Income Statement

The financial statement that reports the net income or net loss for the fiscal period is covers is the

Work Sheet

The net income or net loss amount shown on the income statement must agree with the amount show on the

Income Statement section of the worksheet

The source of information for completing the income statement is the