Accounting Chapter 9 Review

The balance sheet reports the financial strength of a business.

• True

• False

What does the income statement represent?

• The basic accounting equation

• Net income or net loss

• Changes in capital

What does a net income do to the owner's capital account?

• Increase

• Decrease

• Balance

• Equal

Each financial statement has the same heading.

• True

• False

• Depends on the Month

Which is included in the Statement of Changes in Owner's Equity?

• Revenue, expense, and income summary

• Assets, owner's equity, and liabilities

• investments, net income or net loss, and withdrawals

The Statement of Changes in Owner's Equity is used in preparing the Income Statement.

• True

• False

• Sometimes

What is the difference between total revenue and total expenses over a specific period of time?

• Owner's Equity

• Income Summary

• The Balance Sheet

• Net Income or Net Loss

What does the Statement of Changes in Owner's Equity summarize?

• The accounting equation

• How much debt you have

• Changes to the capital account

• Balance sheet

How do you calculate Return on Sales?

• Net Sales by Net Income

• Net Income by Sales

• Current Assets by Liabilities

• Current Liabilities by Cash and Receivables

What are the two primary financial statements prepared for a sole proprietorship?

• Accounting Equation

• Statement of Changes in Owner's Equity

• T Accounts

• Income Statement and Balance Sheet