FREE ACCOUNTING AND STUDY GAMES ABOUT

PDF Download

FREE ACCOUNTING AND STUDY GAMES ABOUT

ACCOUNTINGCHAPTER7 EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -20 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: 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.

Answer:

True Question 2: Financial ratios on an income statement are calculated by dividing sales and total expenses by net income.

Answer:

False Question 3: An amount written in parentheses on a financial statement indicates a negative amount.

Answer:

True

Question 4: When a business has two different sources of revenue, both revenue accounts are listed on the income statement.

Answer:

True Question 5: The Owner's Equity section of a balance sheet is the same for all businesses.

Answer:

False Question 6: The owner's capital amount reported on a balance sheet is calculated as: capital account balance plus drawing account balance less net income.

Answer:

False Question 7: Double lines are ruled across the balance sheet columns to show that the column totals have been verified as correct.

Answer:

True Question 8: Internal users of accounting information include company managers, officers, and creditors.

Answer:

False Question 9: An income statement reports information on a specific date, indicating the financial condition of a business.

Answer:

False Question 10: A financial ratio is a comparison between two components of financial information.

Answer:

True

Question 11: No company should have a vertical analysis ratio for total expenses higher than

48.0%.

Answer:

False Question 12: Information needed to prepare an income statement comes from the Account Title column and the Income Statement columns of a work sheet.

Answer:

True Question 13: A balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity.

Answer:

True Question 14: Double lines ruled across both amount columns of an income statement indicate that the amount has been verified.

Answer:

True Question 15: The income statement for a service business has five sections: heading, Revenue, Expenses, Net Income or Net Loss, and Capital.

Answer:

False Question 16: The position of the total asset line on the balance sheet is determined after the Equities section is prepared.

Answer:

True Question 17: The income statement's account balances are obtained from the work sheet's Income Statement columns.

Answer:

True

Question 18: A balance sheet reports information about the elements of the accounting equation.

Answer:

True Question 19: The Full Disclosure accounting concept is applied when a company always prepares financial statements at the end of each monthly fiscal period.

Answer:

False Question 20: The net income on an income statement is verified by checking the balance sheet.

Answer:

False