Accounting 2 Ch 15 Test Review

A balance sheet reports the financial condition of a business on a specific date.

• True

• False

An income statement is used to report a business's financial progress.

• True

• False

Dividends payable is a long-term liability.

• True

• False

Beginning merchandise inventory less purchases made during the fiscal period plus ending inventory equals cost of merchandise sold.

• True

• False

When more detailed information about an item on a financial statement is needed, a supporting schedule may be prepared.

• True

• False

Earnings per share is calculated by dividing net income after federal income taxes by the number of shares outstanding.

• True

• False

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

• True

• False

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

• True

• False

Revenue less cost of merchandise sold equals net income.

• True

• False

Total expenses on an income statement are deducted from the gross profit on sales to find net income.

• True

• False