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Accounting Chapter 7 questions with actual answers. $9.29   Add to cart
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Accounting Chapter 7 questions with actual answers.
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  • Accounting 101

Accounting Chapter 7 questions with actual answers.

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  • August 29, 2024
  • 3
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • accounting chapter 7 questions with actual answers

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  • Accounting 101
  • Accounting 101

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Accounting Chapter 7 questions with
actual answers.

A balance sheet has three sections: heading, assets, and liabilities. ANS - False.



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



The formula for calculating net income is: total revenue minus total expenses equals net income. ANS -
True.



The net income calculated for the income statement and the net income on the work sheet must be the
same. ANS - True.



The Adequate Disclosure accounting concept is applied when financial statements contain all
information necessary to understand a business's financial condition. ANS - True.



On an income statement, double lines are ruled across both amount columns to indicate that debits
equal credits. ANS - False.



For a service business, the revenue reported on an income statement includes components for total
expenses and net income. ANS - True.



The formula for calculating the total expenses component percentage is: total expenses divided by total
sales equals total expenses component percentage. ANS - True.



The financial condition of a business refers to its financial strength. ANS - True.



The current capital to be reported on a balance sheet is calculated as: the capital account balance plus
net income equals current capital. ANS - False.

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