Question 1

Select the one term that best fits each definition.
-The difference between total revenue and total expenses when total revenue is greater.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 2

Only accounts with a balance are listed in the Trial Balance columns of a work sheet.

Accepted Answer

A) True 
 B)False  False

Question 3

Many businesses choose a one-year fiscal period that ends during a period of high business activity.

Accepted Answer

A) True 
 B)False

Question 4

Select the one term that best fits each definition.
-The difference between total revenue and total expenses when total expenses are greater.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 5

Select the one term that best fits each definition.
-Reporting income when the cash is received and expenses when the cash is paid.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Select the one term that best fits each definition.
-A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 8

The accounting concept Consistent Reporting is being applied when a word processing service business reports revenue per page one year and revenue per hour the next year.

Accepted Answer

A) True 
 B)False

Question 9

Select the one term that best fits each definition.
-A fiscal period consisting of 12 consecutive months.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 10

Select the one term that best fits each definition.
-Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 11

Adjusting entries must be posted to the general ledger accounts.

Accepted Answer

A) True 
 B)False

Question 12

Select the one term that best fits each definition.
-Cash paid for an expense in one fiscal period that is not used until a later period.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 13

Select the one term that best fits each definition.
-A proof of the equality of debits and credits in a general ledger.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 14

If the Trial Balance columns are not equal and the difference can be evenly divided by 9, then the error most likely is a transposed number.

Accepted Answer

A) True 
 B)False

Question 15

Select the one term that best fits each definition.
-Reporting income when it is earned and expenses when they are incurred.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 16

When the Income Statement Debit column total is greater than the Income Statement Credit column total on a work sheet, the business has a net income.

Accepted Answer

A) True 
 B)False  False

Question 17

Select the one term that best fits each definition.
-A financial statement showing the revenue and expenses for a fiscal period.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Question 18

Two financial statements are prepared from the information on the work sheet.

Accepted Answer

A) True 
 B)False

Question 19

If an amount is written in an incorrect column of a work sheet, the error should be erased and the amount should be written in the correct column.

Accepted Answer

A) True 
 B)False  True

Question 20

Select the one term that best fits each definition.
-A financial statement that reports the value of a business's assets, liabilities, and owner's equity on a specific date.

Accepted Answer

A)   accrual basis of accounting
B)   adjusting entries
C)   adjustments
D)   balance sheet
E)   cash basis of accountingF)  fiscal periodG)  fiscal yearH)  income statementI)  net incomeJ)  net lossK)  prepaid expenseL)  trial balanceM)  work sheet

Exam 6: Work Sheet and Adjusting Entries

Select the one term that best fits each definition. -The difference between total revenue and total expenses when total revenue is greater.

Correct AnswerverifiedShow Answer

Only accounts with a balance are listed in the Trial Balance columns of a work sheet.

Correct AnswerverifiedFalse

Many businesses choose a one-year fiscal period that ends during a period of high business activity.

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -The difference between total revenue and total expenses when total expenses are greater.

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -Reporting income when the cash is received and expenses when the cash is paid.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.

Correct AnswerverifiedShow Answer

The accounting concept Consistent Reporting is being applied when a word processing service business reports revenue per page one year and revenue per hour the next year.

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -A fiscal period consisting of 12 consecutive months.

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.

Correct AnswerverifiedShow Answer

Adjusting entries must be posted to the general ledger accounts.

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -Cash paid for an expense in one fiscal period that is not used until a later period.

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -A proof of the equality of debits and credits in a general ledger.

Correct AnswerverifiedShow Answer

If the Trial Balance columns are not equal and the difference can be evenly divided by 9, then the error most likely is a transposed number.

Correct AnswerverifiedShow Answer

Select the one term that best fits each definition. -Reporting income when it is earned and expenses when they are incurred.

Correct AnswerverifiedShow Answer

When the Income Statement Debit column total is greater than the Income Statement Credit column total on a work sheet, the business has a net income.

Correct AnswerverifiedFalse

Select the one term that best fits each definition. -A financial statement showing the revenue and expenses for a fiscal period.

Correct AnswerverifiedShow Answer

Two financial statements are prepared from the information on the work sheet.

Correct AnswerverifiedShow Answer

If an amount is written in an incorrect column of a work sheet, the error should be erased and the amount should be written in the correct column.

Correct AnswerverifiedTrue

Select the one term that best fits each definition. -A financial statement that reports the value of a business's assets, liabilities, and owner's equity on a specific date.

Correct AnswerverifiedShow Answer

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