True False
False
1. 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.
True
10. Totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credits. (p. 166)
True
11. The income statement and balance sheet are prepared from the Trial Balance columns on the work sheet. (p. 169)
True
12. Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total. (p. 171)
True
13. If errors are found on a work sheet, they must be erased and corrected before any further work is completed. (p. 173)
True
14. When two column totals are not in balance on the work sheet, the difference between the two totals is calculated and checked. (p. 173)
True
15. 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. (p. 173)
True
16. 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. (p. 174)
True
17. Most errors occur in doing arithmetic. (p. 174)
False
18. The best way to prevent errors is to use a calculator. (p. 174)
True
19. Adjusting entries must be posted to the general ledger accounts. (p. 176)
False
2. A fiscal period must be 12 months in length.
True
2. Adjusting entries must be posted to the general ledger accounts.
True
20. The balance in Supplies Expense after adjusting entries are recorded represents the amount of supplies used during the fiscal period. (p. 176)
False
3. Journals, ledgers, and work sheets are considered permanent records.
False
3. Many businesses choose a one-year fiscal period that ends during a period of high business activity.
True
4. The heading on a work sheet contains the name of the business, the name of the report, and the date of the report. (p. 159)
True
4. Two financial statements are prepared from the information on the work sheet.
False
5. Only accounts with a balance are listed on a trial balance. (p. 160)
False
6. The four questions asked when analyzing an adjustment are: Why? Where? When? and How? (p. 164)
False
6. When the Income Statement Debit column total is greater than the Income Statement Credit column total on a work sheet, the business has a net income.
True
7. Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total.
True
7. The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense. (p. 164)
Fales
8. The two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance. (p. 165)
False
9. The accounting concept Consistent Reporting is being applied when a word processing service business reports revenue per page one year and revenue per hour the next year.
True
9. The balance in Prepaid Insurance after adjusting entries are recorded represents the amount of insurance premium still remaining. (p. 165)