Merchandising business are charging fees for rendered services.

False

Transactions which are financial in nature, such as payment and purchases in cash.
Financial Character

A promissory note issued by the customer is an evidence of the notes receivable account.
True

Noncurrent assets are kept principally for trading.

False

Manufacturing business converts raw materials to finished goods.

True

What type of accounts are Prepaid Insurance, Prepaid Advertising, and Prepaid Expenses?
Asset

ABC Store records the transaction by a debit to Accounts Receivable for P1,000 and a credit to
Service Revenues for P1,000. What is the effect of this entry upon the accounting equation for
ABC Store?
Asset Increase, Equity Increase

Increase in assets is recorded as a Debit..

True

Cash and cash equivalents are current assets.

True

Revenues are commonly called the "cost of doing business."

True

Property, plant, and equipment are not assets.

False

This principle has two aspects, the quantifiability and stability of peso.
Stable monetary unit

A liability is a present obligation arising out of past events.

True

If Revenue is greater expenses, there is a Gain.

False
Manufacturing business changes the basic inputs into products that are sold to individual
customers.
True

Capital is another term for equity.

True

When the owner makes withdrawal from the business for personal use, only the asset
decreases.
False

The Income Statement is composed of the revenues and expenses.

True

Which of the following will cause owner's equity to increase?

Revenue

In August 2016, ABE Store receives the P4,000 for services rendered. What is the effect on the
accounting equation and which accounts are affected?
Owners WRONG

Operating expenses and operating income or operating loss are items which can be found in an
income statement prepared in a multi-step approach.
True

These are reductions in the total sales price given to the customer if the account will be paid
within a short period of time.
Sales discount

Mr. Alvarez , capital is an example of account title used for the equity of the owner in what form
of business organization?
Sole Proprietorship

This is the common transaction happening in the organization.

All W

What item do we deduct from the beginning capital of the statement of changes in equity to
arrive at the ending capital?
Withdrawals

It is a basic accounting principle that states that income is earned regardless of when cash is
received, and expenses are incurred regardless of when cash is pai~
Accrual

The equation for cost of goods sold is:

+-

Accrual basis of accounting is a basic accounting principle that states that income is earned
regardless of when cash is received, and expenses are incurred regardless of when cash is
paid
True

Cash receipts from customers is P200,000, cash paid to suppliers is P10,000 and cash paid to
employees is P25,000, how much is the net cash from operating activities.
165,000

The following consists an income statement for merchandising businesses except:

Net profit W

The firm can create as many capital accounts as there are owners in a corporation.
True

Cash flows are categorized into three types; these activities does not determine the purpose for
which the cash has been used.
True

Losses are outflows that result from the main activity of the business.
False

Net sales is P450,000, sales discounts is P35,000, and sales returns and allowances is
P15,000. Compute for the gross sales.
Cannot be determined

The acquisition and disposal of long-term assets, including investments not considered cash
equivalents are parts of an investing activities.
True

Beginning inventory is P50,000, net cost of purchases is P125,000, and ending inventory is
P35,000. Compute for the cost of goods sold.
140,000

Net sales is P450,000, sales discounts is P35,000, and sales returns and allowances is
P15,000. Compute for the gross sales.
500,000
It is the difference arrived at after deducting withdrawals from the sum of the beginning capital,
additional investments, and profit.
Ending Capital

Cash flows are categorized as follows except:

Developing activities

An income statement for _________________ could be written using a single-step approach.

Service

It relies entirely on the payment and receipt of cash.

Cash basis acc.

Its use varies depending on the form of business organization.

Capital

The following are terms pertaining to Owner's Equity except:

Net worth

It is the common account title in the financial statement.

Cash

These are deducted in the purchase price either because of returns or reductions due to defects
or damages of goods purchased.
Purchase returns and allowances

Activities related to the acquisition and disposal of long-term assets, including investments not
considered cash equivalents is called financing activities.
False

There are common account titles between assets and liabilities..

True

Property, plant, and equipment are assets.

True

Assets minus Liabilities is equal to Equity is also considered an Accounting Equation.

True

This is the type of business which offers services for a fee

Service
Services businesses offer products.
False

Long-term liabilities are noncurrent.

True

Cash and cash equivalents are current assets.

True

A mortgage payable is a noncurrent liability.

False

Owner's Equity is to sole proprietorship as Capital is to corporation.

False

Owner's equity usually consists of the owner's investment and the earned profit less any
withdrawals made during a given period.
True

The following are the advantages of forming a partnership except

~Minimal regulatory requirements than corporation.
can exist for a period of 50 years

The cash in a financing activity mostly involve current assets or income and expense accounts.
True

Operating activities may be presented using either the direct method or indirect method.
True

The cost accountant handles Management Accounting.

False

The Calendar year ends on January 01.

True

A liability is a present obligation arising out of past events.

True

Liabilities are present obligations arising from past events..

True
We could find the period covered by the statement at the ________________ of the statement
of the account. Heading
These are added to the capital beginning to arrive at the total investments used during the year
Investments

These are reductions in the total sales price given to the customer if the account will be paid
within a short period of time. Sales discounts

It is consists of the owner's investment and the earned profit less any withdrawals made during
a given period.
Capital

It is the difference arrived at after deducting withdrawals from the sum of the beginning capital,
additional investments, and profit.
Ending

These are added to the capital beginning to arrive at the total investments used during the year.
Investments

The single-step approach could be used in writing the income statement for _______________.
Service

The following are included in the income statement for merchandising businesses except:
Business name

Net Profit is derived from:

Statement of Income

These are resources of the firm which were taken by the owner for personal use.
Withdrawals

Owner's equity represents the right of the owner over the resources of the firm.
True

A sole proprietor's equity account is written as follows: name of owner, capital.

True

The Statement of Changes in Equity for a Sole Proprietorship may include the following except:
Stockholder's equity account

An accounting principle where in income shall only be recognized when cash is received, and
expenses shall only be recorded when cash is paid.
Cash Basis Accounting

Income of a merchandising business comes from _________________.

Sales of the product

It represents the right of the owner over the resources of the firm.
Equity

Cost of goods sold items can be found in a multi-step approach of preparing the income
statement.
True

Revenues of a service business is synonymous to the following except:

Sales

The first part of a statement of income for a merchandising business is composed of the
following except:
Beginning inventory

The following are cash flow transactions under the direct method except
Cash paid to creditors

In this principle, it is assumed that the business owners or managers are separate from the
business enterprise.
Business entity principle

This occurs whenever the enterprise purchased goods or received services on account issuing
a promissory note to settle the account in a specified future date.
Notes Payable

This is derived from the income statement and is also added to the beginning capital and
additional investments done during the year.
investment

Among all the activities, only financing activities have different ways of being presented.
True

The following are examples of non-current assets except

~Property, plant and equipment.
Accounts Receivable

Stockholders are the owners of a corporation.

False
The Statement of Financial Position is commonly prepared at the year ended December 31.
False

Cash flows are categorized into three types: operating, investing, and financing activities.
False

The transactions falling under operating activities does not primarily involve cash received from
customers and paid to suppliers, lenders, or employees.
False

CPA means Certified Public Accountant.

True

The income statement for merchandising businesses usually has eight sections: Net sales, Cost
of goods sold, Gross profit, Operating expenses, Operating income or operating loss, Other
revenues and gains (expenses and losses), Net profit or net loss.
True

Cost of goods sold items can be found in a multi-step approach of preparing the income
statement.
True

The owner's equity is also called capital, net assets, or net worth.
True

Withdrawals or drawings are resources of the firm which were taken by the owner for personal
use.
True

It is a voluntary association of at least 15 persons having a common bond of interest for the
purpose of generating capital from among themselves through a systematic and continuous
savings program in order to grant loans to each other at reasonable rates of interest.
partnership

In cash basis accounting, income shall only be recognized when cash is received, and
expenses shall only be recorded when cash is paid.
True

Operating expenses and operating income or operating loss are items which can be found in an
income statement prepared in a multi-step approach.
False
Investing activities cannot be presented in direct or indirect method.
True

In the statement of changes in equity of a sole proprietor, this is deducted from the beginning
capital to arrive at the ending capital
net profit

Gross profit is P150,000, total selling expenses is P39,000, and total general and administrative
expenses cost P52,000. Compute for the operating income.
59,000

Accrual basis of accounting is a basic accounting principle that states that income shall only be
recognized when cash is received, and expenses shall only be recorded when cash is paid.
False

These are activities related to the acquisition and disposal of long-term assets.
investing activities

Which one is not a cash flow activity?

Assessing

Financing activities are the common transactions happening in the organization.

False

Income statement for merchandising businesses usually have how many sections?
7

The heading of a statement of income usually consists of the following except:

None of the choices

How many sections do income statement for merchandising businesses usually have?
7

The story of the success, or failure, of operations is shown in the ____________________​​___.

Statement of Income

It represents the total amount of inventory on hand.

Beginning Inventory W Merchandise Inventory
It is the usual account title used for corporations.
Stockholder's Equity

These are deducted in the purchase price either because of returns or reductions due to defects
or damages of goods purchased.
Purchase returns and allowances

Total is synonymous to ___________.

Gross

If the firm has been operating in the past year, the beginning capital of the current year is
_____________ the ending capital of the previous year.
The same

This could be deducted to the beginning capital and additional investments done during the
year.
Net Loss

Liabilities are present obligations arising from past events..

True

Land is a current asset..

True

Long-term debts are noncurrent.

False

Current assets are obligations expected to be settled after a year.

False

Capital is also known as a residual asset..

False

Accounting is the language of business.

True

Capital are claims by creditors against the company's assets.

False

Accrual basis of accounting records income when earned regardless of when cash is received.
True
Sole proprietorships mostly managed by their owners.
False

The law that manages Corporations

Corporate code

The Statement of Financial Position commonly adopts the Calendar Year. True

A mortgage payable is a noncurrent liability..

False

Account form is more commonly used form of an SFP.

True

Residual asset is the result of combining liabilities and equity.

False

SFP is also the Balance sheet.

True

A liability is a present obligation arising out of past events.

True

The Statement of Financial Position is commonly prepared at the year ended December 31..
False

Accounting is just all about recording.

False

CPA means Certified Public Accountant.

True

Stockholders are the owners of a corporation.

Any twelve-month period starting from any month other than 01 January Fiscal year

A sole proprietor's equity account is written as follows: name of owner, capital.

True

The income statement for merchandising businesses usually has the following sections, namely:
revenue, expenses and net profit or loss.
False
The statement of income describes the revenues and gains, expenses and losses along with
the resulting net income or net loss of the business due to its operating activities for a given
period of time.
True

The partnership uses the account title _________________for the equity of the owner.
Name of owner, capital (create as many capital accounts as there are owners)

Investing activities are activities related to revenue-producing activities.

False

The statement of income of a service business is simpler than merchandising business.

Merchandising business' statement of income is composed of revenue, expense and net
profit/net loss.
The 1st statement is false.The 2nd statement is true.

There are common account titles between assets and liabilities..

True

Current assets are expected to be used after 12 months.

False

Income statement is another term for the Statement of Financial Position. False

Liabilities are company's obligations.

True

Long-term debts are noncurrent.

True C

The cost accountant handles Management Accounting.

False

GAAP is Generally Applicable Accounting Principles.

False

Withdrawals are also known as "drawings".

True

Entity principle separate business from personal transactions.

True

Noncurrent assets are assets that are expected to be used within 12 months.
False

Bank loans are credited to Loans Payable or Mortgage Payable.

True

Cash and cash equivalents are noncurrent assets..

True

Also known as Time Period Concept

Periodicity

Two or more people join together to contribute money, property or industry for purposes of
dividing the profits (or loss) among themselves. Partnership

SFP is an acronym for Statement of Financial Position, which is also known as the Balance
Sheet.
True

These are deducted in the purchase price either because of returns or reductions due to defects
or damages of goods purchased.
Purchase returns and allowances

The owner's equity is usually consists of ___________________.

Owner's investment and the earned profit less any withdrawals made during a given period.

If the firm has been operating in the past year, the beginning capital of the current year is
_____________ the ending capital of the previous year.
The same

The account title used for corporations:

Stockholders' Equity

The following consists an income statement for merchandising businesses except:

None of the choices

It is a financial Statement that focuses on the residual interest of the owner in the business.
Statement of Changes in Equity

It represents the total amount of inventory on hand.

Merchandise Inventory

It is the total or gross purchases less any purchase discounts and purchase returns and
allowances.
Net cost of goods purchased

The following are terms pertaining to Owner's Equity except:

Net Assets /Gross

It is the difference arrived at after deducting withdrawals from the sum of the beginning capital,
additional investments, and profit.
Ending Capital

The heading of a statement of income usually consists of the following except:

None of the choices

This shows relationship between the inflows and outflows of resources within the firm is an
indicator of how successful the business operation was for a given period.
Statement of Income

Refers to total or gross sales less any sales discounts, and sales returns and allowances.
Sales returns and allowances

We use a multi-step approach in preparing a statement of income for

____________________​​__.
Merchandising business

Losses are outflows that result from the main activity of the business.
False

Manufacturing business converts raw materials to finished goods.

True

Noncurrent assets are kept principally for trading.

False

Revenue is synonymous to Gains.

False

The Fiscal year always ends in December.

False

The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a
specific date is the __________.
Statement of Cash Flow
This type of business usually does activities that converts raw materials into finished products,
and sells this to other firms or to individuals.
Manfacturing

When the owner makes withdrawal from the business for personal use, only the asset
decreases.
False

Branch of accounting solely for government purposes such as collecting of taxes, computing of
national income, fixing the gross national product target, ascertaining the balance of payments
position, etc..
Government Accounting

This principle requires that "those costs and expenses incurred in earning a revenue should be
recorded and reported in the same period".
Matching Principle

Residual asset is the result of combining liabilities and equity.

False

Accrual basis of accounting recognizes income regardless of when cash is received.

True

Asset are resources owned and/or controlled by the enterprise.Asset are acquired by an
enterprise as a result of a past transaction or event.
Both statements are true

Accounting records and statements are based on the most reliable data available so that they
will be as accurate and as useful as possible.
stable monetary unit

Income from the sale of an equipment of a machine business is considered a gain.

False

This concept states that assets and services that are acquired should be recorded at their actual
cost.
cost concept

This occurs whenever the enterprise purchased goods or received services on account issuing
a promissory note to settle the account in a specified future date.
Notes Payable

Accounting is the system of measuring business activities of financial character.

True

Every time a business transaction occurs like purchase of supplies, payment of receivables,
granting credit, payment of utilities, etc., we assume that for every value received there is an
equivalent value parted with.
Dual Effect

Liabilities are company's obligations.

True

The following are current assets, except::

Select one:
Long-term liabilities
Accounts receivable
Cash

Long-term liabilities are noncurrent.

True

An asset is a present obligation arising out of past events.

False

The Income Statement is composed of the revenues and expenses.

True

Cash and Accounts Receivable are two examples of accounts that are reported on the classified
balance sheet under the heading __________.
Current Asset

Withdrawals are also known as "drawings".

True

The group of accounts of the entity is called ledger.

True

Meaning of GAAP
General Accepted Accounting Principles :)

Current assets are obligations expected to be settled after a year.

False

A cash withdrawal was made by the owner from the business for personal use.
Owner's (or Stockholders')
Liabilities Increase, Equity Increase
Asset Decrease, Equity Decrease

The income statement line gross profit will appear on which income statement format?
Select one:
a. none of the choices
b. Multiple-step
d. Dual-step

Going-concern is a concept where accountants assume that the business will continue to
operate for a foreseeable future.
True

The financial statement that reports the revenues and expenses for a period of time such as a
year or a month is the ___________.
Select one:
a. Statement of Cash Flow
c. Income Statement
d. Statement of Owner's Equity

Also known as Time Period Concept

Periodicity

Cash, Accounts receivable and Office supplies are examples of current assets.
True

All of the following are general and administrative expenses except

Select one:
b. Taxes and business licenses
c. Advertising & promotional expenses
d. Office salaries

The T-account is the simplest form of account.

True

The following are examples of non-current assets except

Accounts Receivable

What type of accounts are Deferred Revenues and Unearned Revenues?

Revenue xxx

Wages are considered expenses.

True
The business receives cash from a bank loan.
Equity Decrease, Equity No Effect xxx

Increases in the assets are recorded on the right side of the account.
False

AICPA means
American Institute of Certified Public Accountants

Salaries are considered income to the business.

False

The Statement of Financial Position commonly adopts the Calendar Year.

True

Merchandising business usually does activities that converts raw materials into finished
products, and sells this to other firms or to individuals.
False

Which of the following names is NOT associated with the income statement?
Statement of Financial Position

We technically call recording as bookkeeping or journalizing because we use the book we call
_________________.
Worksheet

This principle has two aspects, the quantifiability and stability of peso.
Stable monetary unit

Debit entries with a larger number would always possess a debit balance.
True

What type of accounts are Prepaid Insurance, Prepaid Advertising, and Prepaid Expenses?
Asset

This concept ensures that accounting information is current and is reported at regular intervals.
time-period concept

What is the effect on Single Lady's accounting equation when it pays the account to the supplier
P22,500? And which accounts are affected?
Asset Decrease, Liability Decrease
Capital are claims by creditors against the company's assets.
False

Transactions which are financial in nature, such as payment and purchases in cash.
Financial Character

A Statement of Financial Position is a formal statement presenting the three accounting

elements which are?
Revenue, expense and profit xxx

The statement of financial position is also known as the Profit and Loss Statement.
False

The following are current assets, except::

Long-term liabilities

Income statement covers a period of time.

True

The following are examples of non-current assets except

Accounts Receivable

Capital are claims by creditors against the company's assets.

False

Accounting is defined in part as the art of ____________, ___________, and ____________ in

a significant manner and in terms of money, transactions and events.
recording, classifying, summarizing

Losses are added to the income statement credit column and the balance sheet debit column in
the worksheet.
False

Ownership of a cooperative is divided into shares of stock.

False

Inflows of resources arising from the sale of goods and services.

Revenues
Revenues are also known as income.
True

In August 2016, ABE Store receives the P4,000 for services rendered. What is the effect on the
accounting equation and which accounts are affected?
Asset Increase, Equity Increase

If revenue increases and cost of goods sold remains constant, gross profit also increases.
True

What form of the SFP wherein the assets are listed on the left side and the liabilities and equity
are on the right side, and the two sides must equal?
Account form

Asset are considered current when it is kept principally for trading. If realization of the asset is
expected to be within twelve months after the date of the SFP, it is current.
Both are true

Salaries are considered income to the business.

False

Gains increase the income of the business.

True

The business bought furniture for office use on account.

Asset Increase, Liability Increase

Net loss indicates that the business is doing well.

False

Which of the following will cause owner's equity to decrease?

Net Loss

Operating expenses and operating income or operating loss are items which can be found in an
income statement prepared in a multi-step approach.
False
A debit account in excess of credits would possess a credit balance.
True

Land is a current asset..

True

SFP is also the Balance sheet.

True

What is the effect on accounting equation of Triple A when it records the transaction as a debit
to Rent Expense for P8,000 and a credit to Accounts Payable for P8,000?Owner's (or
Stockholders')
Owner's (or Stockholders') xxx

Ownership of a cooperative is divided into shares of stock.

False

The business bought furniture for office use on account.

Equity Decrease, Liability Increase xxx

Capital is equal to Asset minus Liability. Asset is equal to Liability minus Capital.
The 1st statement is true

It is the difference between net sales and the cost of goods sold.
Gross Profit

Examples of real accounts are revenues, expenses, and drawing accounts.

False

Accounting is based on the single-entry bookkeeping.

False

Which of the following is a current liability?

Accounts Payable

Cash, Accounts receivable and Office supplies are examples of current assets.
True
The owner invests trucksto be used in the business.
Liabilities Increase, Equity Increase xxx

Capital is equal to Asset minus Liability. Asset is equal to Liability minus Capital.
Both statements are true xxx

The accounts in the report form of SFP are arranged in a single column wherein assets are
listed first, followed by the liabilities and owner's equity..
True

The difference between revenues and gains, and expenses and losses when the expenses and
losses are greater than the revenues and gains.
Net assets xxx

Net income is a result of expenses higher than revenues.

False

Prepaid rent is an asset..

True

Refers to the outflows of resources usually paid in cash or incurred on credit resulting from the
main operating activities of the business.
Expenses

Cash and cash equivalents are current assets.

True

Businesses usually have three activities: investing, financing, and recording.

False

Cash basis accounting only records transaction when cash is received or paid.
True

It refers to total or gross sales less any sales discounts, and sales returns and allowances.
Net Sales
Which of the following is a current liability?
Long-term deferred revenue

This form of business organization has limited liability, meaning creditors cannot go after their
personal property in case of bankruptcy.
Single Proprietor

Current assets are expected to be used after 12 months.

False

As compared to the corporation, single proprietorship is easier to form because of its simplicity
in operation.
True

Asset is equal to Liability plus Capital. Liability is equal to Asset minus Capital.
Both statements are true

Utilities include electric bills and internet fees.

True

The difference between net sales and the cost of goods sold.
Gross profit

This type of business is concerned with buying and selling of goods for profit.
Manufacturing

Single proprietorship is concerned with the manufacture of goods into finished product.
False

Noncurrent assets are assets that are expected to be used within 12 months.
False

Capital is another term for equity.

True

This is the type of business which offers services for a fee

Service business

Cash, building, and office supplies are examples of assets.

True
The asset is written first followed by the liabilities and equity in a report form of SFP. The
revenue, cost of goods sold and gross profit is written just like an account in the ledger in the
account form of SFP.
Both statements are true xxx

Income statement covers a period of time.

True

Increase in assets is recorded as a Debit..

True

The combination of Selling Expenses and Administrative Expenses is referred to as

Operating Expense

Accounts Payable and Notes Payable are two examples of accounts that are reported in the
SFP under the heading.
Current Liability

Accounting is based on the single-entry bookkeeping.

False

Which of the following will cause owner's equity to decrease?

Net Loss

The business provided service to customers on account.

Asset Increase, Equity Increase

In preparing the income statement for service businesses, expenses are deducted from the
revenue to arrive at the net profit or loss.
True

These involve changes in the equity and liability accounts in the accounting records.
Investing Activities WRONG

Which transaction represents accrual basis of accounting?

Interest paid W

In the preparation of cash flow, the following items are considered using accrual basis of
accounting except:
increase in trade payables W

The income statement for merchandising businesses usually has the following sections, namely:
revenue, expenses and net profit or loss.
False

Among all the activities, only ____________________​​ have different ways of being presented.
Operating Activities

To arrive at the net cash from operating activities using the direct method we add/deduct the
following except:
Decrease in inventory

What is the effect of cash paid to supplier of P20,000 to the cash beginning of P100,000?
increase of P20,000

Which one does not form part of cost of goods sold?

owner's equity

The heading of a statement of income usually consists of the following except:

Business Name

If the firm has been operating in the past year, the beginning capital of the current year is the
same as the ending capital of the previous year

Sale of equipment for P500,00 is an example of what activity?

Select one:
a. Investing
b. Developing
d. Financing

Capital is the account title used for_________________​​___.

Sole proprietorship and Partnership

What item do we deduct from the beginning capital of the statement of changes in equity to
arrive at the ending capital?
Withdrawals

It is the usual account title used for corporations.

a. Stockholder's Equity C

We add the investment of the owner to the beginning capital to arrive at this.
Ending capital

The statement of income of a service business is composed of the following elements except:
Cost of goods sold
If additional investment of the owner is P650,000 and payment of long-term loan to the bank is
P700,000, how much is the net cash increase or decrease from financing activities?
Decrease of P50,000

The statement of income of a service business does not include this item.
Cost of goods sold

Cash basis accounting is not acceptable in the accounting industry though we need to
understand this in order to prepare our cash flow statement.
True

The owner's equity is also called capital, net assets, or net worth.
True

Which is true about Accrual basis of accounting?

It states that companies who sell their goods on credit will record the said transactions as sales
even if they have not paid cash.

The partnership uses the account title _________________for​ the equity of the owner.
Name of owner, capital (create as many capital accounts as there are owners)

This form of business organization uses the account title like; Mr. Cruz, capital, Mr. Sta. Maria,
capital and Mr. del Pilar, capital for the equity of its owners.
partnership

Investing activities are activities related to revenue-producing activities.

False

The following are types of cash flows except:

Select one:
None of the choices

The income statement for service businesses does not include.

cost of goods sold

The service business uses the multi-step approach in preparing the statement of income. The
revenues, expenses and net profit/net loss are part of the multi-step approach.
Both statements are true C

Which form of business organization's statement of income has cost of goods sold?
merchandising business

Stockholder's equity is the account title used by what form of business organization?
corporation

Income statement is another term for the Statement of Financial Position.

False

The law that manages Corporations

Corporate code

Long-term debts are noncurrent.

True

Long-term liabilities are noncurrent.

True

The statement of income describes the revenues and gains, expenses and losses along with
the resulting net income or net loss of the business due to its operating activities for a given
period of time.
True

What form of business organization which can create many accounts as there are owners for
the owner or owners' equity?
partnership

Investments made by the owner may represent the original investment made at the start of
business, and any additional investments thereafter.
True

Cash basis accounting relies entirely on the payment and receipt of cash. Accrual basis of
accounting recognizes expenses when incurred, whether or not any cash is received or pai~
Both statements are true