In the preparation of financial statements, accounting principles are applied differently from one fiscal period to the next.

• True

• False

Every amount on a financial statement is accompanied by a related discription.

• True

• False

Data needed to prepare the Liabilities section of a balance sheet are obtained from the Debit column of an adjusted trial balance.

• True

• False

The difference between an asset's account balance and its related contra account balance is known as its book value.

• True

• False

The amount of dividends paid during the year is presented on the income statement.

• True

• False

Interest income is reported on the income statement in a section labeled Other Revenue.

• True

• False

Operating revenue less cost of merchandise sold equals net income.

• True

• False

Total operating expenses on an income statement are deducted from gross profit to find income from operations.

• True

• False

Increasing sales revenue while keeping cost of merchandise sold the same will increase gross profit.

• True

• False

All the information required to prepare a statement of stockholder's equity is obtained from the income statement and the adjusted trial balance.

• True

• False