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WorksheetsAccounting: Chapter 7 Review
Total questions: 20
Worksheet time: 10mins
Name
Class
Date
1.
The net income calculated for the income statement and the net income on the work sheet must be the same.
a)
True
b)
False
2.
A balance sheet has three sections: heading, assets, and liabilities.
a)
True
b)
False
3.
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
4.
Component percentages on an income statement are calculated by dividing sales and total expenses by net income.
a)
True
b)
False
5.
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
6.
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
7.
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
8.
An amount written in parentheses on a financial statement indicates an estimate.
a)
True
b)
False
9.
A component percentage is the percentage relationship between one financial statement item and the total that includes that item.
a)
True
b)
False
10.
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
11.
The formula for calculating the total expenses component percentage is total expenses divided by total sales.
a)
True
b)
False
12.
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
13.
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
14.
The formula for calculating net income is total revenue minus total expenses equals net income.
a)
True
b)
False
15.
The current capital to be reported on a balance sheet is calculated as the capital account balance plus net income.
a)
True
b)
False
16.
A balance sheet reports financial information on a specific date and includes the assets, liabilities and owner's equity.
a)
True
b)
False
17.
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
18.
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
19.
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
20.
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
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