19 terms

Accounting Chapter 6

STUDY
PLAY

Terms in this set (...)

Fiscal Period
The length of time for which a business summarizes and reports financial information.
Work Sheet
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
Trial Balance
A proof of the equality of debits and credits in a general ledger.
What is written in the three-line heading on a work sheet?
Name of the business, name of report, and date of report.
What general ledger accounts are listed in the Trial Balance columns of a work sheet?
All general ledger accounts are listed in the Trial Balance columns of a work sheet, even if some accounts do not have balances.
Adjustments
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.
Explain how the concept of Matching Expenses with Revenue relates to adjustments.
An expense should be reported in the same fiscal period that it is used to produce revenue.
List the four questions asked in analyzing an adjustment on a work sheet.
1.) What is the balance of the account?
2.) What should he balance be for this account?
3.) What must be done to correct the account balance?
4.) What adjustment is made?
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 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.
Which accounts are extended into the Balance Sheet columns of the work sheet?
Asset, liability, and owner's equity accounts.
Which accounts are extended into the Income Statement columns of the work sheet?
Revenue and expense accounts.
In which Balance Sheet column do you record net income on the work sheet?
Balance Sheet Credit columns
In which Balance Sheet column do you record do you record net loss on the work sheet?
Balance Sheet Debit column.
What is the first step in checking for arithmetic errors when two column totals are not in the balance?
Subtract the smaller total from the larger total to find the difference.
What is one way to check for an error caused by transposed numbers?
The difference between two column totals can be divided evenly by 9.
What term is used to describe an error that occurs when numbers are moved to the right or the left in an amount column?
A slide.