Chapter 8

The asset, liability, and owner's equity accounts are extended to the _____of the work sheet.

Balance sheet section (A)

The amount of net income for the period is added to the Balance Sheet credit total because it increases the balance in the_____account

Capital (B)

A net loss is entered in the_____column of the Income Statement section of the work sheet.

Credit (C)

If there is a net loss for the period, it is entered in the_____column of the Balance Sheet section of the work sheet.

Debit (D)

_____is transferring balances from the Trial Balance section of the work sheet to either the Balance Sheet section or the Income Statement section.

Extending (E)

A double rule under a column of figures means that the figures are to be added or subtracted.

False

A single rule across both amount columns of the Trial Balance section means that no more entries will be made.

False

A work sheet always covers a period of one month.

False

Account titles are listed on the work sheet in alphabetical order.

False

After the net loss is calculated, it should be reflected in the debit column of the Income Statement section and the credit column of the Balance Sheet section.

False

All liability accounts are listed in the credit column of the Income Statement section.

False

Amounts from the Trial Balance section are extended first to the Income Statement section.

False

The work sheet is a working paper and is prepared in pen.

False

Total expenses for the period are reflected in the total of the credit column of the Income Statement section.

False

The_____of the work sheet answers the questions "who," "what," and "when."

Heading (F)

Revenue and expense accounts are listed in the Trial Balance section of the work sheet and in the _____of the work sheet

Income Statement Section (G)

The_____allows a business to match revenue against expenses as a means of measuring profit for the period.

Matching principle (H)

Did Top Hat Chimney Service have a net income or net loss for the month? What was the amount of the net income or net loss?

Net income $2,063

A(n)_____results when revenue is larger than expenses.

Net income (I)

If the total of the credit column of the Income Statement section is less than the debit column, there is a(n)_____for the period.

Net loss (J)

The ending balances of the Advertising Expense and Maintenance Expense were inadvertently transposed when they were transferred to the work sheet. Would this error have any effect on the trial balance?

No

_____means drawing a single line under a column of amounts.

Ruling (K)

Should a single rule or a double rule be drawn across the Trial Balance section under the last amount shown?

Single rule

The first two columns on the work sheet are used to enter the ______.

Trial balance (L)

A net income for the period is the amount left after the expenses for the period have been subtracted from revenue.

True

A net loss decreases the balance in the owner's capital account.

True

A work sheet is prepared at the end of each fiscal period.

True

All asset accounts are extended to the Balance Sheet section.

True

Preparing the work sheet is the sixth step in the accounting cycle.

True

The Trial Balance section contains entries for all accounts in the general ledger including those with zero balances.

True

What question should the third line of the heading for this work sheet answer? How would the third line be worded?

Who? What? When? For the month ended October 31

A(n)_____is a working paper used to collect information from the general ledger accounts.

Worksheet M

Is the trial balance in balance? If yes, what is the amount of the totals? If no, what is the amount of the difference?

Yes it is balanced $20,954