Chapter 8 Review

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The ________ of the work sheet includes all the permanent general ledger accounts.

Balance Sheet Section

The permanent general ledger accounts are extended to the _________ of the work sheet.

Balance Sheet section

The amount of net income for the period of added to the total of the credit column of the Balance Sheet section because it increases the balance in the ________ account.

Capital

A net income is entered in the ________ column of the Balance Sheet section.

Credit

A net loss is entered in the _________ column of the Income Statement section.

Credit

A net income is entered in what column of the Income Statement section?

Debit

Transferring balances from the Trial Balance section is called ________ the balances.

Extending

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

Extending

True or False: A ledger account having a zero balance is not listed on the Trial Balance section of the work sheet.

False

True or False: A work sheet always covers a period of one month.

False

True or False: Account names are listed on the work sheet in alphabetical order.

False

True or False: All liability accounts are listed in the credit column of the Income Statement section.

False

True or False: Amounts from the Trial Balance section are extended first to the Income Statement section.

False

True or False: If the debit column of the Income Statement section of the work sheet is greater than the credit column of the Income Statement section, there is a net income for this period.

False

True or False: The maximum period covered by the accounting cycle is one month

False

True or False: The work sheet has four sections: the heading, the trial balance section, the income statement section and the balance sheet section.

False

True or False: The work sheet is prepared in pen because it is a formal document.

False

True or False: Total expenses for the period are reflected in the totals of the credit column of the Income Statement section and the credit column of the Balance Sheet section.

False

The _______ of the work sheet answers the who, what and when.

Heading

The ________ of the work sheet includes only the temporary general ledger accounts.

Income Statement Section

According to _________, expenses are matched against revenue for the same period.

Matching Principle

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

Matching Principle

A _______ results when revenue is larger than expenses.

Net Income

The amount left after the expenses for the period have been subtracted from revenue for the period.

Net Income

If the total of the credit column of the Income Statement section is less than the debit column, there is a _________ for the period.

Net Loss

When the Income Statement debit column total is greater than the Income Statement credit column if the Balance Sheet section.

Net Loss

Drawing a line under a column of amounts is known as what?

Ruling

The first two columns of the work sheet are used to enter the _________.

Trial Balance

What part of the work sheet includes all the general ledger accounts?

Trial Balance section

Account titles are listed on the work sheet in the same order as they appear in the general ledger.

True

True or False: A double rule across both amount columns of the trial balance section means that no more entries will be made.

True

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

True

True or False: A net loss decreases the balance in the owner's equity account.

True

True or False: A net loss for the period is entered in the debit column of the Balance Sheet section.

True

True or False: A single rule under a column of amounts means that the amounts are to be added or subtracted .

True

True or False: All asset accounts are extended to the Balance Sheet section.

True

True or False: Amounts from the Trial Balance section are first extended to the Balance Sheet section.

True

True or False: The Trial Balance section will have entries for all accounts in the general ledger including those with a zero balance.

True

True or False: The work sheet is used to pull together all the information needed to prepare the financial statements and complete the end-of-period activities.

True

A paper used to collect information from the general ledger accounts

Work Sheet

A working paper used to collect information from the ledger accounts.

Work Sheet

What explains the who, what and when of the work sheet?

the heading


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