Chapter 8

Question 1

what is a worksheet

Answer 1

a working paper used to collect information from the ledger accounts for use in completing end-of-period activities

Question 2

what is ruling

Answer 2

• drawing a line; a single rule (line) under a column of figures indicates that the entries above the rule are to be added or subtracted
• if an amount is a total and no further processing is needed, a double rule is drawn under it

Question 3

what is matching principle

Answer 3

principle requiring that the expenses incurred in accounting period are matched with revenue earned in the same period

Question 4

what is net loss

Answer 4

the amount by which total expenses exceed total revenues for the accounting period

Question 5

what is net profit

Answer 5

when your revenues are greater than your expenses

Question 6

what are the five parts of a worksheet

Answer 6

1. three heading line: who what when
2. account name
3. trial balance
4. income statement
5. balance sheet

Question 7

what is the difference between a balance sheet and an income statement

Answer 7

BALANCE SHEET: assets, liabilities, and owner’s equity

INCOME STATEMENT: revenues and expense