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accounting c7
Question | Answer |
---|---|
a balance sheet reports financial information over a specific period of time | false |
the financial condition of a business refers to its financial strength | true |
a balance has three sections: heading, assets, and liablilites | false |
the formula for calculating net income is total revenue minus total expenses equals net income | true |
the net income calculated for the income statement and the net income on the work sheet must be the same | true |
on an income statement, double lines are ruled across both amount columns to indicate that debits equal credits | false |
for a service business, the revenue reported on an income statement includes components for total expenses and 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 current capital to be reported on a balance sheet is calculated as: the capital account balance plus net income equals current capital | false |
component percentages on an income statement are calculated by dividing sales and total expenses by net income | false |
a component percentage is the percentage relationship between one financial statement item and the total that includes that item | true |
the adequate disclosure accounting concept is applied when financial statements contain all information necessary to understand a business's financial condition | 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 |
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 |
information needed to prepare in income statement comes from the trial balance columns and the income statement columns of a work sheet | false |
an amount written in parentheses on a financial statement indicates an estimate | false |
a balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity | true |
when a business has two different sources of revenue, a separate income statement should be prepared for each kind of revenue | 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 |
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 |
the date on a monthly income statement prepared on july 31 is written as | for month ended july 31 2017 |
information needed to prepare an income statement's revenue section is obtained from a work sheets account title column and | income statement credit column |
information needed to prepare an income statements expenses section is obtained from a work sheets account title column and | income statement debit column |
the amount of net income calculated on an income statement is correct if | it is the same as the net income 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 |