UPDATED Accounting Chapter 6 True and False

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. ON TEST

False

A fiscal period must be 12 months in length.

False

Journals, ledgers, and work sheets are considered permanent records

True

The heading on a worksheet contains the name of the business, the name of the report, and the date of the report.

False

Only accounts with a balance are listed on a trial balance. ON TEST

False

The four questions asked when analyzing an adjustment are: Why? Where? When? and How?

True

The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense.

False

The two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance

True

The balance in Prepaid Insurance after adjusting entries are recorded represents the amount of insurance premium still remaining.

True

Totaling and ruling the Adjustments columns of a worksheet are necessary to prove the equality of debits and credits.

False

The income statement and balance sheet are prepared from the Trial Balance columns on the worksheet.

True

Net income on a worksheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total ON TEST

True

If errors are found on a worksheet, they must be erased and corrected before any further work is completed. ON TEST

True

When two column totals are not in balance on the worksheet, the difference between the two totals is calculated and checked.

True

If the difference between the totals of Debit and Credit columns on a worksheet can be evenly divided by 9, then the error is most likely a transposed number. ON TEST

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

False

The best way to prevent errors is to use a calculator

True

Adjusting entries must be posted to the general ledger accounts ON TEST(2)

True

The balance in Supplies Expense after adjusting entries are recorded represents the amount of supplies used during the fiscal period. ON TEST

many buisnesses false ;two financials false; net income blablabla

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