Computer Accounting with

Peachtree by Sage Complete

Accounting 2012 16th
Edition
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Chapter 07

Financial Statements

True / False Questions

1. Once journal entries are recorded and posted, Peachtree automatically
calculates financial statements.

True False

2. Financial statements printed by Peachtree reflect the preceding month and

current month only.

True False

3. The Gross Profit by Departments financial statement is a custom report

designed for the sample company, Bellwether Garden Supply.

True False

4. Masking allows you to organize your business by department.

True False

5. In Peachtree when a wrench is shown next to a financial statement it means

that the statement is a custom-designed form.

True False

6. The income statement is a company's summary of the assets and liabilities

on a specific date.

True False
7. Net income results when the expenses are greater than revenues.

True False

8. Peachtree's income statement includes percentage-of-revenue columns for

both the current month and year-to-date amounts.

True False

9. The statement of cash flow shows cash inflows, cash outflows and the overall
change in cash.

True False

10. The financial statements are independent of each other.

True False

Multiple Choice Questions

11. The balance sheet lists:

A. Assets, liabilities and capital of a business

B. Revenues and expenses of a business

C. The percentage of revenue at the end of the year

D. The percentage of debt at the end of the year

E. Cash disbursements

12. The income statement is a summary of:

A. Cash receipts and where they came from

B. Cash payments and what they were used for

C. The overall change in cash

D. Revenues and expenses over a period of time

E. Cost of goods purchased

13. Expenses and revenues over a period of time are shown on the:

A. Statement of cash flow.

B. Departmental gross profit report.

C. Income statement.

D. Balance sheet.

E. Retained earnings statement.

14. One way to display the balance sheet is to use these menu bar selections:

A. Reports & Forms; Financial Statements, Print

B. Reports & Forms; Financial Statements, Inventory, Options

C. Reports & Forms; Financial Statements, <Standard> Balance Sheet,

Display

D. Reports & Forms; Financial Statements, <Standard> Financial Statements,

Display

E. Tasks; select System, make the selections to print

15. Business managers and owners, depend on financial statements because:

A. Peachtree automatically calculates accurate financial statements.

B. Financial statements are for internal use only.

C. They have primary responsibility for the business.

D. They can evaluate cash and make appropriate decisions.

E. They can use account balances to customize financial statements.

16. The Income Statement's net income or (net loss) is also shown on the:

A. Income statement's revenue section.

B. Balance sheet's capital section.

C. Departmental gross profit totals.

D. Cash balance at the end of the period.

E. General ledger trial balance.

17. To go from the income statement to an original entry, use this function:

A. Drill down.

B. Options, specific the range.

C. Display.

D. Filter.

E. Columns.

18. A departmentalized accounting system provides information that can be used

to:

A. Custom design departmental statements.

B. Evaluate profitability and cost effectiveness.

C. Evaluate current assets.

D. Modify PCA's standard forms.

E. Figure out the accounting period.

19. When you print or display a report, you can filter the departmentalized report
using ____________________________ characters:

A. A prefix.

B. Wildcard.

C. Hexadecimal.

D. Text-based.

E. Unrelated.
20. The _______________________________ file includes all the data needed for
Chapter 7 work.

A. Exercise 6-2.ptb.

B. Exercise 6-1.ptb.

C. Chapter 6.ptb.

D. Exercise 5-2.ptb

E. Chapter 5.ptb.
 Chapter 07 Financial Statements Answer Key

True / False Questions

1. Once journal entries are recorded and posted, Peachtree automatically

calculates financial statements.

TRUE

2. Financial statements printed by Peachtree reflect the preceding month and

current month only.

FALSE

All financial statements show the current month and year-to-date amounts
and each may be modified to fit the user's needs.

3. The Gross Profit by Departments financial statement is a custom report

designed for the sample company, Bellwether Garden Supply.

TRUE
4. Masking allows you to organize your business by department.

TRUE

5. In Peachtree when a wrench is shown next to a financial statement it

means that the statement is a custom-designed form.

TRUE

6. The income statement is a company's summary of the assets and liabilities

on a specific date.

FALSE

An income statement is a company's summary of revenues and expenses

for a period of time.

7. Net income results when the expenses are greater than revenues.

FALSE

A net loss results when the expenses are greater than revenues.

8. Peachtree's income statement includes percentage-of-revenue columns for

both the current month and year-to-date amounts.

TRUE
9. The statement of cash flow shows cash inflows, cash outflows and the
overall change in cash.

TRUE

10. The financial statements are independent of each other.

FALSE

There are interrelationships between financial statements.

Multiple Choice Questions

11. The balance sheet lists:

(p. 226)

A. Assets, liabilities and capital of a business

B. Revenues and expenses of a business

C. The percentage of revenue at the end of the year

D. The percentage of debt at the end of the year

E. Cash disbursements

Difficulty: 1 Easy
12. The income statement is a summary of:
(p. 227)

A. Cash receipts and where they came from

B. Cash payments and what they were used for

C. The overall change in cash

D. Revenues and expenses over a period of time

E. Cost of goods purchased

Difficulty: 2 Medium

13. Expenses and revenues over a period of time are shown on the:
(p. 227)

A. Statement of cash flow.

B. Departmental gross profit report.

C. Income statement.

D. Balance sheet.

E. Retained earnings statement.

Difficulty: 2 Medium
14. One way to display the balance sheet is to use these menu bar selections:
(p. 232)

A. Reports & Forms; Financial Statements, Print

B. Reports & Forms; Financial Statements, Inventory, Options

C. Reports & Forms; Financial Statements, <Standard> Balance Sheet,

Display

D. Reports & Forms; Financial Statements, <Standard> Financial

Statements, Display

E. Tasks; select System, make the selections to print

Difficulty: 2 Medium

15. Business managers and owners, depend on financial statements because:

(p. 225)

A. Peachtree automatically calculates accurate financial statements.

B. Financial statements are for internal use only.

C. They have primary responsibility for the business.

D. They can evaluate cash and make appropriate decisions.

E. They can use account balances to customize financial statements.

Difficulty: 2 Medium
16. The Income Statement's net income or (net loss) is also shown on the:
(p. 228)

A. Income statement's revenue section.

B. Balance sheet's capital section.

C. Departmental gross profit totals.

D. Cash balance at the end of the period.

E. General ledger trial balance.

Difficulty: 2 Medium

17. To go from the income statement to an original entry, use this function:
(p. 238)

A. Drill down.

B. Options, specific the range.

C. Display.

D. Filter.

E. Columns.

Difficulty: 1 Easy
18. A departmentalized accounting system provides information that can be
(p. 226)
used to:

A. Custom design departmental statements.

B. Evaluate profitability and cost effectiveness.

C. Evaluate current assets.

D. Modify PCA's standard forms.

E. Figure out the accounting period.

Difficulty: 2 Medium

19. When you print or display a report, you can filter the departmentalized
(p. 235)
report using ____________________________ characters:

A. A prefix.

B. Wildcard.

C. Hexadecimal.

D. Text-based.

E. Unrelated.

Difficulty: 3 Hard
20. The _______________________________ file includes all the data needed for
(p. 225)
Chapter 7 work.

A. Exercise 6-2.ptb.

B. Exercise 6-1.ptb.

C. Chapter 6.ptb.

D. Exercise 5-2.ptb

E. Chapter 5.ptb.

Difficulty: 1 Easy