Chapter 7: Financial Statements for Proprietorship

The area of accounting which focuses on reporting information to internal users.

• Financial Accounting

• Payroll Accounting

• Managerial Accounting

• Accounts Payable Accounting

A comparison between two components of financial information.

• Financial ratio

• Ratio analysis

• Money ratio

• Cash ratio

The accounting concept applied when the revenue from business activities and the expenses associated with earning that revenue are recorded in the same accounting period.

The financial statement that reports income/loss along with expenses.

• Balance sheet

• Income statement

• Owner's equity statement

• Work sheet

Which financial statement reports the financial condition of the business?

• Income Statement

• Balance Sheet

• Statement of Owner's Equity

• Work sheet

The order that you would prepare your financial statements would be . . .

• Work Sheet, Balance Sheet, Income Statement, Statement of Owner's Equity

• Statement of Owner's Equity, Income Statement, Balance Sheet

• Statement of Owner's Equity, Balance Sheet, Income Statement, Work Sheet

• Income Statement, Statement of Owner's Equity, Balance Sheet

The financial statement that reports the changes in the capital account for a proprietorship for a period of time.

• Statement of Owner's Equity

• Balance Sheet

• Income Statement

• Trial Balance

The calculation and interpretation of financial ratios

• Financial Ratio

• Money Ratio

• Ratio Analysis

• Cash Ratio

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

The accounting concept applied when financial statements are prepared with the expectation that a business will remain in operation indefinitely