Chapter 15 True False

Front 1

Beginning merchandise inventoy less purchases made during the fiscal period plus ending inventory equals cost of mechandise sold

Back 1

False

Front 2

Revenue less cost of merchandise sold equals net income.

Back 2

False

Front 3

On an income statement, componet pecentages are calculated by dividing the amount of each componet by the expenses.

Back 3

False

Front 4

Gross profit must be less than total expenses in order to provide for a desirable net income

Back 4

False

Front 5

An income statement is used to report a business's financial progress

Back 5

True

Front 6

The owndes' equity of a business is affected when a business earns an income o incurs a loss.

Back 6

True

Front 7

When more detailed information about an item on a financial statement is needed, a supporting schedule may be prepared

Back 7

True

Front 8

An income statement for a merchandising business has three main sections: Revenue section, cost of merchandise sold section, and expenses section

Back 8

True

Front 9

Total expenses on an income statement are deducted from the goss profit on sales to find net income

Back 9

True

Front 10

Increasing sales revenue while keeping cost of merchandise sold the same will increase goss profit on sales

Back 10

True

Front 11

Most businesses coect an unacceptable componet percentage by simply increasing te markup on merchandise purchased for sale because an increased selling price will always increase profit.

Back 11

False

Front 12

A balance sheet reports the financial condition of a business on a specific date.

Back 12

True

Front 13

If a company has determined that the acceptable componet for cost of merchandise soled is not more than 51.1%, the current yea's acutal componet pecentage of 48.9% is unacceptable

Back 13

False

Front 14

Reporting financial information the same way from one fiscal period to the next is an application of the accounting condept adequate disclosue

Back 14

False

Front 15

Dividends are reported on the statement of stockholders' equity and the balance sheet

Back 15

False

Front 16

Earnings per share is calculated by dividing net income after federal income taxes by the number of shares outstanding.

Back 16

True

Front 17

Low price-earnings ratios are typically associated with high growth companies

Back 17

False

Front 18

A value assigned to a share of stock and printed on a stock certificate is called par value

Back 18

True

Front 19

Dividends payable is a long-term liability

Back 19

False

Front 20

Every amount of a financial statement is accompanied by a related descriptions.

Back 20

False