Accounting I Chapter 8

8. The asset, liability, and owner's equity accounts are extended to the ____ of the work sheet.

Balance Sheet Section

7. The amount of net income for the period is added to the Balance Sheet credit total because it increases the balance in the ____ account.

Capital

5. A net loss is entered in the ____ column of the Income Statement section of the work sheet.

Credit

13. If there is a net loss for the period, it is entered in the ____ column of the Balance Sheet section of the work sheet.

Debit

1. ____ is transferring balances from the Trial Balance section of the work sheet to either the Balance Sheet section or the Income Statement section.

Extending

A double rule under a column of figures means that the figures are to be added or subtracted.

False

A single rule across both amount columns of the Trial Balance section means that no more entries will be made.

False

A work sheet always covers a period of one month.

False

Account titles are listed on the work sheet in alphabetical order.

False

After the net loss is calculated, it should be reflected in the debit column of the Income Statement section and the credit column of the Balance Sheet section.

False

All liability accounts are listed in the credit column of the Income Statement section.

False

Amounts from the Trial Balance section are extended first to the Income Statement section.

False

The work sheet is a working paper and is prepared in pen.

False

Total expenses for the period are reflected in the total of the credit column of the Income Statement section.

False

9. The ____ of the work sheet answers the questions "who?", "what?", and "when?".

Heading

2. Revenue and expense accounts are listed in the Trial Balance section of the work sheet and in the ____ of the work sheet.

Income Statement Section

6. The ____ allows a business to match revenue against expenses as a means of measuring profit for the period.

Matching Principle

3. A(n) ____ results when revenue is larger than expenses.

Net Income

10. If the total of the credit column of the Income Statement section is less than the debit column, there is a(n) ____ for the period.

Net Loss

11. ____ means drawing a line under a column of amounts.

Ruling

4. The first two columns on the work sheet are used to enter the ____.

Trial Balance

A net income for the period is the amount left after the expenses for the period have been subtracted from revenue.

True

A net loss decreases the balance in the owner's capital account.

True

A work sheet is prepared at the end of each fiscal period.

True

All asset accounts are extended to the Balance Sheet section.

True

Preparing the work sheet is the sixth step in the accounting cycle.

True

The Trial Balance section contains entries for all accounts in the general ledger including those with zero balances.

True

12. A(n) ____ is a paper used to collect information from the general ledger accounts.

Work Sheet