Accounting Chapter 6 true and false
a fiscal period must be 12 months in length
false
a proof of equality of debits and credits in a general ledger is called a final balance
false
changes are made in general ledger accounts before adjustments are journalized and posted
false
errors on the work sheet should never be erased
false
journals, ledgers, and work sheets are considered permanent records
false
most errors occur in writing number, rather than in doing arithmetic
false
only accounts with a balance are listed on a trial balance
false
only general ledger accounts that have balances are listed on the work sheet's trial balance
false
a balance sheet reports assets, liabilities, and owner's equity on a specific date
true
adjusting entries must be posted to the general ledger accounts
true
adjustments are changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period
true
after all adjustments are recorded, the totals of the work sheet's Adjustments Debit and Credit columns must be the same
true
because a work sheet is not considered a permanent accounting record, it is prepared in pencil
true
errors in the work sheet's Income Statement and Balance Sheet columns might be caused by extending account balances to the incorrect Income Statement or Balance Sheet column
true
financial information is always summarized and reported at the end of a fiscal period
true
if errors are found on a work sheet, they must be erased and corrected before any further work is completed
true
if the difference between the totals of Debit and Credit columns on a work sheet can be evenly divided by 9, look for transposed numbers as a source of errors
true
if the difference between the totals of Debit and Credit columns on a work sheet can be evenly divided by 9, then the error is most likely a transposed number
true
if there are errors in the work sheet's Trial Balance columns, it might be because a general ledger account balance was recorded in the wrong Trial Balance column
true
most errors occur in doing arithmetic
true
net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total
true
the balance in Prepaid Insurance after adjusting entries are recorded represents the amount of insurance premium still remaining
true
the balance in Supplies Expense after adjusting entries are recorded represents the amount of supplies used during the fiscal period
true
the heading on a work sheet contains the name of the business, the name of the report, and the date of the report
true
the two accounts affected by the adjustment for supplies are Supplies and Supplies Expense
true
totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credits
true
when two column totals are not in balance on the work sheet, the difference between the two totals is calculated and checked
true
the accounting concept Consistent Reporting is being applied when a delivery business reports revenue for the number of deliveries made one year and the amount of revenue received for the deliveries made the next year
false
the amount of net income is recorded in the Income Statement Credit column and extended to the Balance Sheet Debit column
false
the best way to prevent errors is to use a calculator
false
the difference between total revenue and total expenses when total expenses are greater is called a net gain
false
the four questions asked when analyzing an adjustment are: why? where? when? and how?
false
the income statement and balance sheet are prepared from the Trial Balance columns on the work sheet
false
the two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance
false