All income that a business receives over a period of time is called profit.

• True
• False

To prepare a budget, a business must be able to identify and predict the amount of each source of income and each type of expense.

• True
• False

An accounts receivable record identifies the companies from which credit purchases were made and the amount purchased, paid and owed.

• True
• False

Sales and profits for a specific period are reported in a company's income statement.

• True
• False

Assets - Liabilities = Owner's Equity

• True
• False

Payroll taxes consist of income taxes, Social Security, Medicare, and unemployment taxes.

• True
• False

The company's liabilities divided by the owners' equity is the current ratio.

• True
• False

At the end of the period covered by a budget, the business will prepare new financial statements.

• True
• False

A business will make a profit if

• revenue equals expenses
• revenue is greater than expenses
• expenses decrease and revenue increases
• expenses are greater than revenue

When a business expands,

• profits will increase
• employees will likely be fired
• marketing activities can temporarily be put on hold
• new factories and equipment may be needed