Chapter 7 - true + false

The Full Disclosure accounting concept is applied when a company always prepares financial statements at the end of each monthly fiscal period

false

Internal users of accounting information include company managers, officers, and creditors

false

The statement of owner's equity reports changes in the capital account for a period of time

true

Information needed to prepare a statement of owner's equity is obtained from the balance sheet

false

When a business has a net loss, the current capital amount will be less than the capital account balance

true

On the balance sheet, the current capital amount is taken from the work sheet

false

An income statement reports information on a specific date indicating the financial condition of a business.

false

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

Information needed to prepare an income statement comes from the Account Title column and the income Statement columns of a work sheet

true

The income statement for a service business has five sections: heading, Revenue, Expenses, Net Income or Net Loss, and Capital

false

The income statement's account balances are obtained from the work sheet's Income Statement columns

true

The net income on an income statement is verified by checking the balance sheet

false

Double lines ruled across both amount columns of an income statement indicate that the amount has been verified

true

A financial ratio is a comparison between two components of financial information

true

Financial ratios on an income statement are calculated by dividing sales and total expenses by net income

false

When a business has two different sources of revenue, both revenue accounts are listed on the income statement

true

An amount written in parentheses on a financial statement indicates a negative amount

true

A balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity

true

The position of the total asset line on the balance sheet is determined after the Equities section is prepared

true

Double lines are ruled across the balance sheet columns to show that the column totals have been verified as correct

true