Transcript Chapter 8 - Prairie Central

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Ms. Appel
True/False 1
True/False 2
True/False 3
True/False 4
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What is True
Reporting in the same fiscal
Period the revenue earned and
The expenses incurred to earn
That revenue is an application
Of the accounting concept
Matching Expenses with Revenue
Row 1,
Col 1
What is False?
The owner’s capital amount
Reported on a balance sheet is
Calculated as: capital account
Balance plus drawing account
Less net income
Row 1,
Col 2
What is True?
The formula for calculating
Net income is: Total revenue
Minus total expenses equals
Net income.
Row 1,
Col 3
What is True?
The net income calculated for
The income statement and the
Net income on the work sheet
Must be the same
Row 1,
Col 4
What is True?
The adequate disclosure accounting
Concept is applied when financial
Statements contain all
Information necessary to
Understand a business’s
Financial condition
Row 2,
Col 1
What is False?
On an income statement,
Double lines are ruled across
Both amount columns
To indicate that debits
Equal credits
Row 2,
Col 2
What is True?
For a service business, the
Revenue reported on an
Income statement includes
Components for total
Expenses and
Net Income
Row 2,
Col 3
What is True?
The formula for calculating
The total expenses component
Percentage is: total expenses
Divided by total sales equals
Total expenses component
Percentage.
Row 2,
Col 4
What is True?
The financial condition of a
Business refers to its
Financial strength
Row 3,
Col 1
What is False?
The current capital to be reported
On a balance sheet is calculated
As: the capital account
Balance plus net income
Equals current capital
Row 3,
Col 2
What is True?
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
Row 3,
Col 3
What is False?
Component percentages on an
Income statement are
Calculated by dividing
Sales and total expenses by
Net Income
Row 3,
Col 4
What is True?
A component percentage is the
Percentage relationship between
One financial statement item
And the total that includes
That item
Row 4,
Col 1
What is True?
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
Row 4,
Col 2
What is True?
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
Row 4,
Col 3
What is False?
Information needed to prepare
An income statement comes from
The trial balance columns
And the income statement
Columns of a work sheet
Row 4,
Col 4
What is False?
An amount written in parentheses
On a financial statement indicates
An estimate.
Row 5,
Col 1
What is False?
A Balance sheet reports
Financial information over
A specific period of time
Row 5,
Col 2
What is True?
A balance sheet reports financial
Information on a specific date
And includes the assets,
Liabilities, and owner’s equity
Row 5,
Col 3
What is False?
When a business has two different
Sources of revenue, a separate
Income statement should
Be prepared for each
Kind of revenue
Row 5,
Col 4
List the formula for finding
current capital when there is
a net loss.
Current Capital = Beginning Capital – Drawing – Net Loss