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Get faster at matching terms Terms in this set (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. true 2. An income statement reports information for a specific date indicating the financial progress of a business in earning a net income or a net loss. false 3. An amount written in parentheses on a financial statement indicates an estimate. false 4. The area of accounting that focuses on reporting information to internal users is called managerial accounting. true 5. The area of accounting that focuses on reporting information to external users is called financial accounting. true 6. When a business has two different sources of revenue, a separate income statement should be prepared for each kind of revenue. false 7. The net income calculated for the income statement and the net income on the work sheet can be different because of adjusting entries. false 8. If a business has a net loss for the period, expenses should be reported before revenues on the income statement. false 9. 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. true 10. A financial ratio is a comparison between two components of financial information. true 11. A balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity. true 12. For a service business, the revenue reported on an income statement is often compared to two items: total expenses and net income. true 13. Return on sales (ROS) is the ratio of net income to total sales. true 14. The calculation and interpretation of a financial ratio is called ratio analysis. true 15. A balance sheet reports financial information for a specific date. true 16. The owner's capital amount reported on a balance sheet is calculated as capital account balance less drawing account balance plus net income. true 17. The Adequate Disclosure accounting concept is applied when financial statements contain all information necessary to understand a business's financial condition. true 18. Vertical analysis is reporting an amount on a financial statement as a percentage of another item on the same financial statement. true 19. The formula for calculating the net income ratio is net income divided by total sales. true 20. The formula for calculating the total expenses ratio is total expenses divided by net income. false Information needed to prepare an income statement's Expense 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. A Information needed to prepare a balance sheet's Assets 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. c The formula for calculating the net income ratio is (A) net income divided by total sales. (B) total sales divided by total expenses. (C) total sales minus total expenses divided by net income. (D) none of these. A When preparing a balance sheet, the amount of owner's capital is calculated using amounts obtained from (A) the general ledger. (B) the income statement. (C) the journal. (D) none of these. D Assuring that financial statements contain all information necessary 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. A 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. D . An income statement reports a business's (A) financial condition over a specific period of time. (B) financial progress over a specific period of time. (C) financial condition on a specific date. (D) financial progress on a specific date. B The date on a monthly income statement prepared on April 30 is written as (A) April 30, 20--. (B) For Month Ended April 30, 20--. (C) 20--, April 30. (D) none of these. B The amount of net income calculated on an income statement is correct if (A) it is the same as the net income shown on the work sheet. (B) debits equal credits. (C) it is the same as the net income shown on the balance sheet. (D) none of these. A Recommended textbook solutions Cambridge IGCSE Business Studies4th EditionKaren Borrington, Peter Stimpson 467 solutions Explorations in Economics1st EditionAlan Krueger 1,281 solutions Understanding Economics1st EditionGary E. Clayton 771 solutions
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Which financial statement reports the financial position of the business at a point in time quizlet?The Balance Sheet reports the financial position of a business at a particular point in time. The Income Statement summarizes the net changes in specific account balances over a period of time.
Which financial statements are over a period of time?Summary Comparison. Which of the following financial statements compute financial information over a period of time versus a snapshot or at a point in time?Which of the following financial statements is measured and reported at a specific point in time? Balance sheet - reports a snapshot of asset, liability, and equity accounts at a specific point in time.
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Which of the following financial statement reports the financial position of a business over a period of time quizlet?
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