Accounting - 9. Financial Statements for a Sole Proprietorship

The Trial Balance section of the work sheet provides the information used in preparing the income statement.

• True
• False
• Acc

The changes in the Cash in Bank account are reported in the statement of changes in owner's equity.

• True
• False

The income statement represents the basic accounting equation.

• True
• False

A net income will increase the owner's capital account.

• True
• False

The heading is the same on all three financial statements.

• True
• False

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.

• True
• False

The balance sheet reports the final balances of the permanent accounts at the end of the fiscal period.

• True
• False

The balance sheet is prepared before the statement of changes in owner's equity.

• True
• False

The primary financial statements prepared for a sole proprietorship are the income statement and the balance sheet.

• True
• False

The information on the statement of changes in owner's equity is used in preparing the income statement.

• True
• False