C F The income statement shows the company's financial assets, liabilities, and owners equity. 8. 9. The general ledger tracks general overhead costs, not construction costs. T T F The "useful life of an asset is at an end when it is no longer economical to use the asset and it may be replaced by a more economical asset. 10. T F Analysis of financial statements is done by dividing one category or group of categories on the company's financial statements by another category or group of categories on the company's financial statements. 11. T F When calculating ratios that include categories on the income statement and categories on the balance sheet, you must use the average balance for the categories on the income statement. Most construction projects require an investment of cash by the contractor. 12. 13. T F The marginal tax rate is the average tax rate paid the taxable income. 14. T F ) Your first objective in financing a construction project should be to obtain a short-term loan. 15. Sim Simple interest is used to pay interest on the principle plus the interest accumulated from previous periods. Multiple Choice Questions (6 points each) 16. Cost control is where the accounting system provides management with the accounting data A. B. c. after the opportunity has passed for management to respond after the opportunity has arrived to correct problems. in time for management to post the transaction. in time for management to make corrections. 17. The construction industry is different than other industries because A. B. construction companies hold significant amounts of inventory production is centralized in construction periodic payments are common in construction cash flow is unimportant in construction