accounting chapter 6 true-false

Question 1

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.

Answer 1

false

Question 2

A fiscal period must be 12 months in length.

Answer 2

false

Question 3

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

Answer 3

false

Question 4

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

Answer 4

true

Question 5

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

Answer 5

false

Question 6

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

Answer 6

false

Question 7

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

Answer 7

true

Question 8

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

Answer 8

false

Question 9

The balance in Prepaid Insurance after adjusting entries are recorded represents the amount of insurance premium still remaining.

Answer 9

true

Question 10

Totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credits.

Answer 10

true

Question 11

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

Answer 11

false

Question 12

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

Answer 12

true

Question 13

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

Answer 13

true

Question 14

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

Answer 14

true

Question 15

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.

Answer 15

true

Question 16

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.

Answer 16

true

Question 17

Most errors occur in doing arithmetic.

Answer 17

true

Question 18

The best way to prevent errors is to use a calculator.

Answer 18

false

Question 19

Adjusting entries must be posted to the general ledger accounts.

Answer 19

true

Question 20

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

Answer 20

true