Chapter 9 Accounting True/False
True
A net income will increase the owner's capital account.
False
A net loss and withdrawals both cause an increase to the capital account.
False
Financial reports are prepared in pencil.
True
The Balance Sheet contains only the permanent general ledger accounts.
True
The Balance Sheet is prepared from information in the balance sheet section of the worksheet and form the Statement of Changes in Owner's Equity.
True
The Balance Sheet reports the final balances of the permanent accounts at the end of the fiscal period.
True
The Balance Sheet represents the basic accounting equations.
False
The Income Statement reflects the basic accounting equation.
False
The Statement of Changes in Owner's Equity is completed as a supporting document for the Income Statement.
True
The Statement of Changes in Owner's Equity is prepared before the Balance Sheet.
False
The Statement of Changes in Owner's Equity shows the changes to the Cash in Bank account.
True
The Statement of Changes in Owner's Equity summarizes the effects on the capital account of the various business transactions that occurred during the period.
False
The balance sheet section of the worksheet provides the information used in preparing the income statement.
False
The first amount column on the Income Statement is used to record debits and the second amount column is used to record credits
False
The heading is the same on all three financial statements.
False
The information on the Statement of Change sin Owner's Equity is used in preparing the Income Statement.
False
The primary financial statements prepared for a sole proprietorship are the Income Statement and the Statement of Changes in Owner's Equity.
False
The sections listed on the Income Statement are the heading, the revenue fro the period, the capital for the period, and the next income or net loss for the period.
True
The wording of the date line in the heading on the income statement is important.