Ch 7 Acct 1 True False

A balance sheet reports financial information over a specific period of time...

• True

• False

The financial condition of a business refers to its financial strength...

• True

• False

A balance sheet has three sections: heading, assets and liabilities

• True

• False

The formula for calculating net income is total revenue minus total expenses = net income

• True

• False

The net income calculated for the income statement and the net income on the worksheet must be the same

• True

• False

On an income statement, double lines are rules across both amount columns to indicate that debits equals credits...

• True

• False

For a service business, the revenue reported on an income statement includes components for total expenses and net income...

• True

• False

The formula for calculating the total expenses component percentage is: total expenses divided by total sales = total expenses component percentage

• True

• False

The current capital to be reported on a balance sheet is calculated as: the capital account balance plus net income equals current capital

• True

• False

Component percentages on an income statement are calculated by dividing sales and total expenses by net income

• True

• False