Accounting Chapter 7

Assuring that financial statements contain all necessary information to understand a business's financial condition is an application of the accounting concept

• Adequate Disclosure
• Going Concern
• Objective Evidence
• Accounting Period Cycle

Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept

• Adequate Disclosure
• Going Concern
• Objective Evidence
• Accounting Period Cycle

A balance sheet reports a business's financial

• condition over a specific period of time
• progress over a specific period of time
• condition on a specific date
• progress on a specific date

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

• For Month ended July 31, 20xx
• July 31, 20xx
• 20--, July 31.
• none of these

Information needed to prepare an income statement's revenue section is obtained from a work sheet's Account title column and 

• Income statement debit column
• Income statement credit column
• Balance sheet debit column
• Balance sheet 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
• debits equal credits
• it is the same as the balance sheet
• none of these

The formula for calculating the net income component percentage is

• net income/total sales
• total sales/total expenses
• total sales-total expenses/net income
• none of these

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

• True
• False

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

• income statement debit column
• income statement credit column
• balance sheet debit column
• balance sheet credit column

When preparing a balance sheet, the amount of owner's capital is obtained from

• the general ledger
• the income statement
• The work sheet's balance sheet credit column
• none of these