Chapter 7 - True/False

The adequate Disclosure accounting concept is applied when financial statements contain all information necessary to understand a business's financial condition.

• True

• False

Stakeholders are any persons or groups who will be affected by an action.

• True

• False

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

• False

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

• False

Information needed to prepare an income statement comes from the trial balance columns and the income statement columns of a work sheet.

• True

• False

The income statement for a service business has five sections: heading, revenue, expenses, net income or loss, and capital.

• True

• False

The income statement's account balances are obtained from the work sheet's Income Statement columns.

• True

• False

The net income on an income statement is verified by checking the balance sheet.

• True

• False

Single lines ruled across an amount column of an income statement indicate that amounts are to be added.

• True

• False

A component percentage is the percentage relationship between one financial statement item and the total that includes that item.

• True

• False