Accounting Chapter 15

Front

Cost of merchandise sold is also known as cost of goods sold.

Back

True

Front

Is the current year's actual component percentage of 48.9 percent unacceptable if a company has determined that the acceptable component percentage for cost of merchandise sold is not more than 51.1 percent?

Back

False

Front

If a company has determined that the acceptable component percentage for gross profit on sales is not less than 45.0 percent, the current year's actual component percentage of 48.9 percent is unacceptable.

Back

False

Front

A statement of stockholders' equity contains two major sections: retained earnings and capital stock.

Back

True

Front

The total amount of stockholders' equity is shown on the last line of a statement of stockholders' equity.

Back

True

Front

Some income may be distributed as dividends to provide stockholders with a return on their investment.

Back

True

Front

A corporation's balance sheet reports assets, liabilities, and stockholders' equity on a specific date.

Back

True

Front

Data needed to prepare the liabilities section of a balance sheet are obtained from a work sheet.

Back

True

Front

Revenue remaining after cost of merchandise sold has been deducted is called gross profit on sales.

Back

True

Front

Total expenses on an income statement are added to the gross profit on sales to find net income before federal income tax.

Back

False