Accounting Chapter 18

The total of the Income Statement debit column is $455,174, and the total of the Income Statement credit column is $494,250. Does the business have a net income or a net loss for the period ? What is the amount ?

A net income of $39,076

A(n) ... is an amount added to or subtracted from an account balance to bring that balance up to date.

Adjustment

The Federal Corporate Income Tax Expense reported in the Trail Balance section of the work sheet is $7,250, and the account balance in the Adjusted Trail Balance section is $7,775. What was the amount of the adjustment? Is it a debit or a credit ?

Amount of the adjustment was a debit of $525

At the start of a fiscal period, the merchandise a business has on hand is called the ...

Beginning Inventory

The adjustment for Merchandise Inventory on the work sheet is a debit of $9,850. The Merchandise Inventory amount in the Adjustment Trail Balance section is $71,396. What was the beginning Merchandise Inventory balance?

Beginning Merchandise account was $61,546

The ending amount for Merchandise Inventory is $1,412.67 more than the beginning amount .

Debit : A Credit : F

During the period, $600.00 of the balance in the Prepaid insurance account has expired

Debit: H Credit: C

Office supplies consumed during the period amounted to $394.40

Debit: I Credit : B

The federal income tax owed for the year must be increased by $312.00

Debit: J Credit: E

.... is the merchandise a business has on hand at the end of the fiscal period.

Ending Inventory

The beginning Merchandise Inventory Balance is $58,500, and the adjustment on the work sheet is a credit of $3,570. Wha is the ending Merchandise Inventory Balance?

Ending Inventory is $54,930

Amounts are extended from the Adjusted Trial Balance sections of the work sheet first to the Income Statement section and then to the Balance Sheet section.

False

If the Merchandisers Inventory account is credited in the Adjustments sections, it means that the ending inventory is greater than the beginning inventory.

False

In the Adjustments section, Prepaid Insurance will normally be debited

False

It is important to complete each section of the ten-column work sheet before moving on to the next section.

False

Like the special journals, each section of the work sheet is footed, totaled, proved, and ruled.

False

The Adjustments section of the work sheet contains the adjusted balance of all general ledger

False

The balance for Supplies in the Trail Balance section of the work sheet represents the beginning Supplies balance minus any supplies used during the period .

False

The value of the ending inventory is always more than the value of the beginning inventory.

False

The titles of the account used to make the adjustment for merchandise inventory is ...

Income Statement

The total of the Income Statement Debit column is $138,592. The company has a net loss of $3,005 for the period. What should the final totals of the Income Statement columns be?

Income Statement columns should be a debit of $138,592 and a credit amount of $135,587

A(n) .... is taken to actually count by hand the items in stock .

Physical Inventory

By the end of the accounting period , $2,340 of the insurance premium had expired, leaving a balance of $780. What was the Prepaid Insurance balance in the Trail Balance section?

Prepaid insurance Balance a the beginning was $3,120

The beginning Merchandise Inventory Balance is $63,000, and the ending Merchandise Inventory Balance is $58,800. What is the amount of the adjustment? Is it credit or a debit ?

The adjustment amount is a credit of $4,200.

The amount reported in the Trail Balance section of the work sheet for Federal Corporate Income Tax Expense was $12,306. At the end of the accounting period, the accountant determined that income taxes for the year would actually be $11,990. What is the amount of the adjustment? Is it a debit or a credit ?

The amount of the adjustment is a credit of $316

The Supplies balance in the Trial Balance section is $1,580. And the amount of the adjustment is a $970 credit . What is the ending Supplies balance?

The ending Supplies balance is $610

Every adjustment affects one permanent and one temporary account .

True

Federal Corporate Income Tax Payable is a liability account .

True

In the Adjustments Credit column, the amount entered on the line for Prepaid Insurance is the amount of the premium that has expired during the period .

True

The Adjustments on the work sheet are the source of the information for the adjusting entries.

True

The debut and credit parts of each adjustment are labeled with a small letter in parentheses.

True

The value of merchandise on hand is most accurately determined by a physical inventory.

True