Accounting Chapter 6
Because a work sheet is used as a permanent record, it is prepared in pen or saved on the computer.
False
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period are called entries
adjustments
A financial statement that reports assets, liabilities, and owner's equity is called a(n)
balance sheet
If the amount of supplies used during the period was $715, you should make an adjusting entry to
debit Supplies Expense for $715 and credit Supplies for $715 ( Your Answer )
An example of a slide is $45.00 written as $54.00
false
As each item in an account or a journal entry is verified, draw a line through it so that anyone looking at the records will know that it is complete and correct
false
If an account has no balance, its account title is not listed on the trial balance.
false
The balance sheet accounts are the revenue, expenses, and owner's equity accounts.
false
The length of time for which a business summarizes and reports financial information is called a(n)
fiscal period
If a pair of work sheet columns does not balance and an error cannot be found on the work sheet, look for an error in posting from the journal to the
general ledger accounts
General ledger account titles are listed on a trial balance
in the same order as they are listed on the chart of accounts
A financial statement showing the revenue and expenses for a fiscal period is called a(n)
income statement
The difference between total revenue and total expenses when total revenue is greater is called
net income
A proof of the equality of debits and credits in a general ledger is called the
trial balance
Before the work sheet is complete, net income must be calculated and the work sheet must be totaled and ruled.
true
Errors in permanent records should never be erased.
true
If you find an incorrect amount on a work sheet, erase the error and replace it with the correct amount
true
When a business pays cash for an expense in one fiscal period, but the expense isn't used until a later period, the expense should be reported in the same fiscal period that it is used to produce revenue.
true
When two column totals are not in balance, the first step is to substract the smaller total from the larger total to find the difference.
true
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements is called a
work sheet