Lessons

Changes are made in general ledger accounts before adjustments are journalized and posted.

False

Errors on the work sheet should never be erased.

False

Most errors occur in recording numbers, rather than in doing arithmetic.

False

Only general ledger accounts that have balances are listed on the work sheet's trial balance.

False

The amount of net income is recorded in the Income Statement Credit column and extended to the Balance Sheet Debit column.

False

The difference between total revenue and total expenses when total expenses are greater is called a net gain.

False

A proof of equality of debits and credits in a general ledger is called a final balance.

False, it is called a trial balance

A balance sheet reports assets, liabilities, and owner's equity on a specific date.

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 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