Accounting Chapter 6 True/ False
A fiscal period must be 12 months in length
False
Journals, ledgers, and work sheets are considered permanent records
False
Only accounts with a balance are listed on a trial balance.
False
Adjusting entries must be posted to the general ledger accounts
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 total 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 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 a business, the name of the report and the date of the report
True
The two accounts affected by adjustment for insurance are prepaid insurance and insurance expense
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
The Four questions asked when analyzing an adjustment are: Why? Where? When? and How?
False
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 balance in prepaid insurance after adjusting entries are recorded represents the amount of insurance premium still remaining.
False
The best way to prevent errors is to use a calculator
False
The income statement and balance sheet are prepared from the Trial Balance columns on the work sheet
False
When two column totals are not in balance on the worksheet, the difference between the two totals is calculated and checked.
True
