Chapter 7 Financial Statements

Front

An Income statement reports information for a specific date indicating the financial progress of a business in earning a net income or a net loss

Back

False

Front

The area of accounting that focuses on reporting information to internal users is called managerial accounting

Back

True

Front

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

Back

False

Front

If a business has a net loss for the period, expenses should be reported before revenues on the income statement

Back

False

Front

A financial ratio is a comparison between two components of financial information

Back

True

Front

For a service business, the revenue reported on an income statement is often compared to two items: total expenses and net income.

Back

True

Front

The calculation and interpretation of a financial ratio is called ratio analysis

Back

True

Front

An amount written in parenthesis on a financial statement indicates an estimate.

Back

False

Front

A balance sheet reports financial information for a specific date

Back

True

Front

Vertical analysis is reporting an amount on a financial statement as a percentage of another item on the same financial statement.

Back

True