Study Guide 6 – Part 2 – Analyzing Accounting Practices Related to a Work Sheet – Flashcards
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The accounting concept Consistent Reporting is being applied when a delivery business reports the number of deliveries made one year and the amount of revenue received for deliveries made the next year
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False
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An accounting period is also known as a fiscal period
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True
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Journals, ledgers, and work sheets are considered permanent records
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False, not work sheets
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All general ledger account titles are listed on a trial balance in the same order as listed on the chart of accounts
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True
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The four questions asked when analyzing an adjustment are: Why? Where? When? and How?
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False, you ask how much is gone?
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The two accounts affected by the adjustments for supplies are Supplies and Supplies Expense
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True
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The two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance
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False, Prepaid Insurance and Insurance Expense
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Totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credits
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True
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Two financial statements are prepared form the information on the work sheet
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True
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Net income on a work sheet is calculated by subtracting the Income Statement Credit column from the Income Statement Debit column total
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False, subtracting debit from credit
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If errors are found on a work sheet, they must be erased and corrected before any further work is completed
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True
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When two column totals are not in balance on the work sheet, the difference between the two totals is calculated and checked
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True
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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 in addition
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False
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If there are errors in the work sheet's Trial Balance columns, it might be because not all general ledger account balances were extended into the Trial Balance column correctly
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True
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Errors in general ledger accounts should never be erased
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True
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The best way to prevent errors is to work carefully; when possible, use a calculator
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True
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Most errors occur in doing arithmetic
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True
