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WorksheetsAccounting Chapter 7
Total questions: 29
Worksheet time: 15mins
Name
Class
Date
1.
Assuring that financial statements contain all necessary information to understand a business's financial condition is an application of the accounting concept
a)
Adequate Disclosure
b)
Going Concern
c)
Objective Evidence
d)
Accounting Period Cycle
2.
Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept
a)
Adequate Disclosure
b)
Going Concern
c)
Objective Evidence
d)
Accounting Period Cycle
3.
A balance sheet reports a business's financial
a)
condition over a specific period of time
b)
progress over a specific period of time
c)
condition on a specific date
d)
progress on a specific date
4.
The date on a monthly income statement prepared on July 31 is written as
a)
For Month ended July 31, 20xx
b)
July 31, 20xx
c)
20--, July 31.
d)
none of these
5.
Information needed to prepare an income statement's revenue section is obtained from a work sheet's Account title column and
a)
Income statement debit column
b)
Income statement credit column
c)
Balance sheet debit column
d)
Balance sheet credit column
6.
The amount of net income calculated on an income statement is correct if
a)
it is the same as net income shown on the work sheet
b)
debits equal credits
c)
it is the same as the balance sheet
d)
none of these
7.
The formula for calculating the net income component percentage is
a)
net income/total sales
b)
total sales/total expenses
c)
total sales-total expenses/net income
d)
none of these
8.
A balance sheet reports financial information over a specific period of time.
a)
True
b)
False
9.
Information needed to prepare a balance sheet liabilities section is obtained from a work sheet's Account title column and
a)
income statement debit column
b)
income statement credit column
c)
balance sheet debit column
d)
balance sheet credit column
10.
When preparing a balance sheet, the amount of owner's capital is obtained from
a)
the general ledger
b)
the income statement
c)
The work sheet's balance sheet credit column
d)
none of these
11.
The financial condition of a business refers to its financial strength.
a)
True
b)
False
12.
A balance sheet has three sections: heading, assets and liabilities.
a)
True
b)
False
13.
The formula for calculating net income is total revenue minus total expenses equals net income.
a)
True
b)
False
14.
The net income calculated for the income statement and the net income on the work sheet must be the same.
a)
True
b)
False
15.
On an income statement, double lines are ruled across both amount columns to indicate that debits equal credits.
a)
True
b)
False
16.
For a service business, the revenue reported on an income statement includes components for total expenses and net income.
a)
True
b)
False
17.
The formula for calculating the total expenses component percentage is total expenses divided by total sales.
a)
True
b)
False
18.
The current capital to be reported on a balance sheet is calculated as the capital account balance plus net income.
a)
True
b)
False
19.
Component percentages on an income statement are calculated by dividing sales and total expenses by net income.
a)
True
b)
False
20.
A component percentage is the percentage relationship between one financial statement item and the total that includes that item.
a)
True
b)
False
21.
The Adequate Disclosure accounting concept is applied when financial statements contain all information necessary to understand a business's financial condition.
a)
True
b)
False
22.
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.
a)
True
b)
False
23.
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.
a)
True
b)
False
24.
Information needed to prepare an income statement comes from the trial balance columns and the income statement columns of a work sheet.
a)
True
b)
False
25.
An amount written in parentheses on a financial statement indicates an estimate.
a)
True
b)
False
26.
A balance sheet reports financial information on a specific date and includes the assets, liabilities and owner's equity.
a)
True
b)
False
27.
When a business has two different sources of revenue, a separate income statement should be prepared for each kind of revenue.
a)
True
b)
False
28.
The owner's capital amount reported on a balance sheet is calculated as: capital account balance plus drawing account balance less net income.
a)
True
b)
False
29.
The owner's equity section of a balance sheet may report different kinds of details about owner's equity, depending on the need of the business.
a)
True
b)
False
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