Chapter 6- true + 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.

false

A fiscal period must be 12 months in length.

false

Journals, ledgers, and work sheets are considered permanent records.

false

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

true

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

false

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

false

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

true

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

false

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 work sheet are necessary to prove the equality of debits and credits

true

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

false

Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total

true

If errors are found on a work sheet, they must be erased and corrected before any further work is completed

true

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

true

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

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

true

The best way to prevent errors is to use a calculator

false

Adjusting entries must be posted to the general ledger accounts

true

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

true