Accounting: Chapter 6 True/False
Terms in this set (17)
The accounting concept Consistent Reporting is being applied when a delivery business reports the number of deliveries made one year and the amount of revenue received for deliveries made the next year.
An accounting period is also known as a fiscal period.
Journals, ledgers, and work sheets are considered permanent records.
All general ledger account titles are listed on a trial balance in the same order as listed on the chart of accounts.
The four questions asked when analyzing an adjustment are: Why? Where? When? and How?.
The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense.
The two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance.
Totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credits.
Two financial statements are prepared from the information on the work sheet.
Net income on a work sheet is calculated by subtracting the Income Statement Credit column total from the Income Statement Debit column total.
If errors are found on a work sheet, they must be erased and corrected before any further work is completed.
When two column totals are not in balance on the work sheet, the difference between the two totals is calculated and checked.
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 in addition.
If there are errors in the work sheet's Trial Balance columns, it might be because not all general ledger account balances were extended into the Trial Balance column correctly.
Errors in a general ledger accounts should never be erased.
The best way to prevent errors is to work carefully; when possible, use a calculator.
Most errors occur in doing arithmetic.
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