Name:
Class:
Date:
Indicate whether the statement is true or false.
1. 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.
a.
True
b.
False
2. Adjusting entries must be posted to the general ledger accounts.
a.
True
b.
False
3. 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.
a.
True
b.
False
4. Only accounts with a balance are listed in the Trial Balance columns of a work sheet.
a.
True
b.
False
5. 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.
a.
True
b.
False
6. The amount of the supplies used during a fiscal period is an expense.
a.
True
b.
False
7. Many businesses choose a one-year fiscal period that ends during a period of high business activity.
a.
True
b.
False
8. Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income
Statement Credit column total.
a.
True
b.
False
9. Two financial statements are prepared from the information on the work sheet.
a.
True
b.
False
10. 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.
a.
True
b.
False
Name:
Class:
Date:
Directions: Select the one term that best fits each definition. Print the letter identifying your choice on the line to the left
of the statement.
a.
accrual basis of accounting
b.
adjusting entries
c.
adjustments
d.
balance sheet
e.
cash basis of accounting
f.
fiscal period
g.
fiscal year
h.
income statement
i.
net income
j.
net loss
k.
prepaid expense
l.
trial balance
m.
work sheet
11. Reporting income when it is earned and expenses when they are incurred.
12. Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.
13. The difference between total revenue and total expenses when total revenue is greater.
14. The length of time for which a business summarizes financial information and reports its financial performance.
15. Reporting income when the cash is received and expenses when the cash is paid.
16. A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
17. Journal entries recorded to update general ledger accounts at the end of a fiscal period.
18. Cash paid for an expense in one fiscal period that is not used until a later period.
19. A financial statement showing the revenue and expenses for a fiscal period.
20. The difference between total revenue and total expenses when total expenses are greater.
21. A financial statement that reports the value of a business’s assets, liabilities, and owner’s equity on a specific date.
22. A proof of the equality of debits and credits in a general ledger.
23. A fiscal period consisting of 12 consecutive months.
Name:
Class:
Date: