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10th Accounting
Chapter 6
| Question | Answer |
|---|---|
| fiscal period | the length of time for which a business summarizes its financial information and reports its financial performance |
| fiscal year | a fiscal period consisting of 12 consecutive months |
| work sheet | a columnar accounting form used to summarize the general ledger information needed to prepare financial statements |
| trial balance | a proof of equality of debits and credits in a general ledger |
| prepaid expense | cash paid for an expense in one fiscal period that is not used until a later period |
| accrual basis of accounting | reporting income when it is earned and expenses when the cash is paid |
| cash basis of accounting | reporting income when the cash is received and expenses when the cash is paid |
| adjustments | changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period |
| balance sheet | a financial statement that reports assets, liabilities, and owner's equity on a specific date |
| income statement | a financial statement showing the revenue and expenses for a fiscal period |
| net income | the difference between total revenue and total expenses when total revenue is greater |
| net loss | the difference between total revenue and total expenses when total expenses are greater |
| adjusting entries | journal entries recorded to update general ledger accounts at the end of a fiscal period |
| True or False: Only accounts with a balance are listed in the Trial Balance columns of a work sheet. | False |
| True or False: Adjusting entries must be posted to the general ledger accounts. | True |
| True or False: Many businesses choose a one-year fiscal period that ends during a period of high business activity. | False |
| True or False: Two financial statements are prepared from the information on the work sheet. | True |
| True or False: If the Trial Balance columns are not equal and the difference can be evenly divided by 9, then the error most likely is a transposed number. | True |
| True or False: When the Income Statement Debit column total is greater than the Income Statement Credit column on a work sheet, the business has a net income. | False |
| True or False: Net income on a worksheet is calculated by subtracting the Income Statement Debit column from the Income Statement credit column total. | True |
| True or False: If an amount is written in an incorrect column of a work sheet, the error should be erased, and the amount should be written in the correct column. | True |
| True or False: The accounting concept Consistent Reporting is being applied when a word processing service business reports revenue per page one year and revenue per hour the next year. | False |
| True or False: The amount of supplies used during a fiscal year is an expense. | True |
Created by:
wellis76
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