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