Accounting Chapter 9
Return on Sales
Indicates what percentage of net sales represents profit
False
Financial reports are often prepared in pencil
Total Liabilities
1. Balance Sheet
Total Liabilitiies and Owner's Equity
1. Balance Sheet
Commission Revenue
1. Income Statement
Rent Expense
1. Income Statement
Net Income
1. Income Statement 2. Statement of Changes in Owners Equity.
Computer Equipment
1. Balance Sheet
Balance Sheet
A ______ is the financial statement that reports the final balances in all asset, liability, and owners equity accounts at the end of the accounting period.
True
A net income will increase the owners Capital Account
Horizontal Analysis
External comparison of company performance
Vertical Analysis
Internal Comparison of company performance
Ratio Analysis
Is a comparison of two items on a financial statement; used to evaluate the relationship between the two items
Balance sheet section of the work sheet
One source of information for completing the balance sheet is the __________.
False
Return on sales is calculated by dividing net sales by net income
Beginning Capital
Statement of Changes in OE
Statement of changes in owners Equity
The ___ is completed as a supporting document for the balance sheet
Income Statement
The ______ reports a business net income or net loss over an entire accounting period
True
The balance sheet contains only the permanent general ledger accounts.
False
The balance sheet is prepared before the statement of changes in owners equity.
True
The balance sheet reports the final balances of the permanent accounts at the end of the fiscal period
True
The balance sheet reports the final balances of the permanent accounts at the end of the fiscal period.
False
The heading is the same on all three Financial Statements
False
The income statement represents the basic accounting equation.
Income statement section of the work sheet
The information needed to prepare the income statement come from the ______?
False
The information on the statement of changes in owners equity is used in preparing the income statement
True
The primary financial statements prepared for a sole proprietorship are the income statement and the balance sheet.
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 trail balance section of the work sheet provides the information used in preparing the income statement