Chapter 6 Accounting Review
Terms in this set (28)
The length of time when a bus. summarizes its financial info& reports its financial performance
A proof of equality of debits and credits in a general ledger.
A columnar account form used to summarize general ledger info needed to prepare financial statements
The difference between total revenue and total expenses when total revenue is greater.
Cash paid for an expense in one fiscal period that is not used until a later period
Changes recorded on a worksheet to update general ledger accounts at the end of a fiscal period
cash basis accounting
Reporting income when the cash is received and expenses when the cash is paid
A fiscal period consisting of 12 consecutive months.
A financial statement that reports assets, liabilities, and owner's equity on a specific date
Journal entries recorded to update general ledger accounts at the end of a fiscal period.
accrual basis accounting
Reporting income when it is earned and expenses when they are incurred
A financial statement showing the revenue and expenses for a fiscal period.
The difference between total revenue and total expenses when total expenses are greater.
True or False: Journals, ledgers, and work sheets are considered permanent records?
Most errors occur in doing arithmetic.
Adjusting entries must be posted to the general ledger accounts.
The income statement & balance sheet are prepared from the trial balance columns on the worksheet
Only accounts with a balance are listed on a trial balance.
If errors are found on a worksheet, they must be erased & corrected before any further work is done
The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense.
The best way to prevent errors is to use a calculator.
The four questions asked when analyzing an adjustment are: Why? Where? When? and How?
A fiscal period must be 12 months in length
The following are considered permanent records.
name of the accountant
The heading on a worksheet does NOT contain the
Assets, Liabilities, Owner's equity
Which accounts will be put in the Balance Sheet columns of the Worksheet
The following accounts will be put in the Income Statement columns?
the error is a transposed number.
If the difference between the totals of debit & credit columns on a worksheet can be evenly divided by 9,
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