Test 7A T/F
The Adequate Disclosure accounting concept is applied when financial statements contain all
information necessary to understand a business's financial condition - ANS-true
For a service business, the revenue reported on an income statement includes components for
total expenses and net income. - ANS-true
the financial condition of a business refers to its financial strength - ANS-true
the owner's equity section of a balance sheet may report different kinds of details about owner's
equity, depending on the need of the business - ANS-true
A component percentage is the percentage relationship between one financial statement item
and the total that includes that item. - ANS-true
the matching expenses with revenue accounting concept is applied when the revenue earned
and the expenses incurred to earn that revenue are reported in the same fiscal period -
ANS-true
Information needed to prepare an income statement comes from the trial balance columns and
the income statement columns of a work sheet. - ANS-false
An amount written in parentheses on a financial statement indicates an estimate. - ANS-false
a balance sheet reports financial information over a specific period of time - ANS-false
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