Accounting 1 C2 P3 Smartbook

In defining a reporting period, which of the following statements is (are) correct?

- A one-year reporting period is known as the fiscal year. - A reporting period is determined by the business. - A reporting period can be one month, one quarter or one year.

Which of the following statements correctly explains how to prepare a trial balance?

- Compute the total of debit balances and the total of credit balances. - List each account title and its amount from the ledger. - Verify that the total debit balances equals the total credit balances.

Which of the following items is (are) required in the heading of every financial statement?

- Date or period of time covered - Name of the financial statement - Name of the business

Which of the following statements is (are) true regarding the balance sheet?

- It depicts the equality of the accounting equation. - It reports the financial position at a point in time. - The report date includes a single calendar day.

Recall that the Balance Sheet reports the equality of the accounting equation and would include which of the following amounts?

- Retained earnings balance at end of period - Total Liabilities - Total Assets

Click and drag on elements in order

1. Income Statement 2. Statement of Retained Earnings 3. Balance Sheet

Which of the following statements explains what a trial balance is?

A trial balance confirms that the sum of debit account balances equals the sum of credit account balances.

Which of the following financial statements reports the financial position of a business at a point in time?

Balance sheet

An efficient way to search for an error causing the trial balance to not be in balance is to check the journalizing, posting, and trial balance preparation in __________ order.

Blank 1: reverse

Which of the statements below is true regarding the statement of retained earnings?

Both the beginning and ending retained earnings balances are reported on the statement.

Describe where dollar signs are appropriate in financial statements.

Dollar signs are used beside the first and last numbers in a column.

Name the accounting document or report that is completed just prior to preparing financial statements and assists in preparing the financial statements.

Trial balance

The balance sheet reports:

assets, liabilities and the ending retained earnings balance

The statement of retained earnings reports:

how equity changed over a period of time

Dollar signs are _____ in journals and ledgers.

not used

An income statement reports:

the revenues less the expenses incurred by a business

Financial statements are prepared from a(n)

trial balance

Which of the following statements are correct regarding how the financial statements are linked?

- Net Income from the income statement is carried to the statement of retained earnings. - The ending balance in the retained earnings account is carried to the balance sheet.

Which of the following financial statements report(s) the financial position of a business over a period of time?

- Statement of cash flows - Statement of retained earnings - Income statement

Which of the following would be included on an income statement?

- Total expenses - Net income - Total revenues

A trial balance is a(n) (list/balance/chart) __________ of accounts and their balances at a point in time and is used to confirm that the sum of debit account balances equals the sum of __________ account balances.

-list -credit

When preparing a trial balance, there are certain steps that need to be followed. Place the following steps in the correct order.

1. List each account title and its amount from the general ledger 2. Compute the total of debit balances and the total of credit balances 3. Verify that total debit balances equal total credit balances

Recall the required information in a financial statement heading. Rearrange the following line items as they would appear in a heading.

1. Name of business 2. Name of financial statement 3. Period of time the financial statement covers

List the steps to search for an error when the trial balance does not balance.

1. Verify that the trial balance columns are correctly added 2. Verify that account balances are accurately entered from the ledger 3. Determine if a debit (or credit) balance is mistakenly listed in the trial balance as a credit (or debit) 4. Recompute each account balance in the ledger 5. Verify that the original journal entry has equal debits and credits