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20 Cards in this Set
- Front
- Back
Beginning merchandise inventoy less purchases made during the fiscal period plus ending inventory equals cost of mechandise sold
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False
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Revenue less cost of merchandise sold equals net income.
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False
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On an income statement, componet pecentages are calculated by dividing the amount of each componet by the expenses.
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False
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Gross profit must be less than total expenses in order to provide for a desirable net income
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False
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An income statement is used to report a business's financial progress
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True
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The owndes' equity of a business is affected when a business earns an income o incurs a loss.
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True
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When more detailed information about an item on a financial statement is needed, a supporting schedule may be prepared
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True
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An income statement for a merchandising business has three main sections: Revenue section, cost of merchandise sold section, and expenses section
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True
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Total expenses on an income statement are deducted from the goss profit on sales to find net income
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True
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Increasing sales revenue while keeping cost of merchandise sold the same will increase goss profit on sales
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True
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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.
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False
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A balance sheet reports the financial condition of a business on a specific date.
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True
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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
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False
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Reporting financial information the same way from one fiscal period to the next is an application of the accounting condept adequate disclosue
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False
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Dividends are reported on the statement of stockholders' equity and the balance sheet
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False
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Earnings per share is calculated by dividing net income after federal income taxes by the number of shares outstanding.
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True
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Low price-earnings ratios are typically associated with high growth companies
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False
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A value assigned to a share of stock and printed on a stock certificate is called par value
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True
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Dividends payable is a long-term liability
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False
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Every amount of a financial statement is accompanied by a related descriptions.
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False
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