accounting- chapter 7

Ace your homework & exams now with Quizwiz!

information needed to prepare a balance sheet liabilities section is obtained from a work sheet's account title column and

balance sheet credit column

a balance sheet has three sections: heading, assets, and liabilities

false

a balance sheet reports financial information over a specific period of time

false

an amount written in parentheses on a financial statement indicates an estimate

false

component percentages on an income statement are calculated by dividing sales and total expenses by net income

false

information needed to prepare an income statement comes from the trial balance columns and the income statement columns of a work sheet

false

on an income statement, double lines are ruled across both amount columns to indicate that debits equal credits

false

the current capital to be reported on a balance sheet is calculated as: the capital account balance plus net income equals current capital

false

the owner's capital amount reported on a balance sheet is calculated as: capital account balance plus drawing account balance less net income

false

when a business has two different sources of revenue, a separate income statement should be prepared for each kind of revenue

false

the date on a monthly income statement prepared on July 31 is written as

for month ended July 31, 2013

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

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

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

none of these

a balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity

true

a component percentage is the percentage relationship between one financial statement item and the total that includes that item

true

an income statement reports information over a period of time, indicating the financial progress of a business in earning a net income or a net loss

true

for a service business, the revenue reported on an income statement includes components for total expenses and net income

true

the adequate disclosure accounting concept is applied when financial statements contain all information necessary to understand a business's financial condition

true

the financial condition of a business refers to its financial strength

true

the formula for calculating net income is: total revenue minus total expenses equals net income

true

the formula for calculating the total expenses component percentage is: total expenses divided by total sales equals total expenses component percentage

true

the matching expenses with revenue accounting concept is applied when the revenue earned and the expenses incurred to earn that revenue are reported in the same fiscal period

true

the net income calculated for the income statement and the net income on the work sheet must be the same

true

the owner's equity section of a balance sheet may report different kinds of details about owner's equity, depending on the need of the business

true

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

a balance sheet reports a business's financial

condition on a specific date


Related study sets

Dosage Calculations Assignment Quiz

View Set

Chapter 48 Management of Patients with Intestinal and Rectal Disorders

View Set

Nutrition Across the Lifespan Ch. 3

View Set

Geometry B, Assignment 4. Quiz 1: Symmetry, Ordered Pairs, and Graphs

View Set