Reference no: EM132785362

TRUE if the statement is correct. Write FALSE if the statement is incorrect and identify the word/group of words that made the statement incorrect.

Question 1. Liquidity refers to the availability of cash in the near future after taking account of the financial commitments over this period,

Question 2. When the Income Statement columns of the worksheet are initially footed, they should be out of balance by the amount of profit or loss.

Question 3. Assets, liabilities, capital and withdrawal accounts are extended to the Income Statement columns of the worksheet.

Question 4. The worksheet helps the accountant discover existing posting and calculation errors.

Question 5. An income statement relates to a specified period while a balance sheet shows the financial position of the entity at a particular date.

Question 6. Financial flexibility is the ability to take effective actions to alter the amounts and timings of cash flows so that it can respond to unexpected needs and opportunities.

Question 7. When the Balance Sheet columns of the worksheet are initially footed, they should be in balance.

Question 8. The worksheet is a convenient device for completing the accounting cycle.

Question 9. The excess of expenses over revenues is called loss.

Question 10. The statement of changes in equity relates the income statement to the balance sheet by showing how the owner's Capital account changed during the accounting period.