chapter 6

Question 1

consistent reporting

Answer 1

applied when the same accounting procedures are followed in the same way of each accounting procedure

Question 2

fiscal year

Answer 2

a fiscal period consisting of twelve consecutive months

Question 3

work sheet

Answer 3

a columnar accounting form used to summarize the general ledger info needed to prepare financial statements

Question 4

reason to use a worksheet

Answer 4

prove that debits equal credits
bring accounting balances up to date
calc. net income or net loss
separate general ledger accounting according to the financial statements

Question 5

pp expense

Answer 5

cash paid for an expanse in one fiscal period that is not used until a later period

Question 6

accrual basis of accounting

Answer 6

reporting income when it is earned and expenses when they incurred

Question 7

cash basis of accounting

Answer 7

reporting income when the cash is received and expenses when cash is paid

Question 8

adjustments

Answer 8

changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period

Question 9

balance sheet

Answer 9

a financial statement that reports the value of a businesses assets, liabilities, and owners’ equities on specific date

Question 10

income statement

Answer 10

financial statement showing the revenue and expenses in a fiscal period

Question 11

net income

Answer 11

the difference between Toal revenue and total expenses when the total revenue is greater

Question 12

net loss

Answer 12

difference between total revenue and total expenses when the total expenses are greater

Question 13

errors in worksheet

Answer 13

• may be errors in accounting records
• may be errors in calculations
• amount may be entered in wrong column

Question 14

adjusting entries

Answer 14

journal entries recorded to update general ledger accounts at the end of a fiscal period