Accounting Chapter 6
T/F: Net income on a work sheet is calculated by subtracting the Income Statement Debit
column total from the Income Statement Credit column total. ✔✔True
T/F: Only accounts with a balance are listed in the Trial Balance columns of a work sheet.
✔✔False
T/F: Journals, ledgers, and work sheets are considered permanent records. ✔✔False
T/F: The two accounts affected by the adjustment for supplies are Supplies and Supplies
Expense. ✔✔True
What is accrual basis of accounting? ✔✔Reporting income when it is earned and expenses
when they are incurred.
T/F: 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. ✔✔True
T/F: Making adjustments to general ledger accounts is an application of the Matching Expenses
with Revenue accounting concept. ✔✔True
T/F: Adjusting entries must be posted to the general ledger accounts. ✔✔True
A fiscal period consisting of 12 consecutive months is
___________________________________. ✔✔Fiscal Year
What is cash basis of accounting? ✔✔Reporting income when the cash is received and
expenses when the cash is paid.
T/F: 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. ✔✔False
T/F: Many businesses choose a one-year fiscal period that ends during a period of high business
activity. ✔✔False
T/F: Net income on a work sheet is calculated by subtracting the Income Statement Debit
column total from the Income Statement Credit column total. ✔✔True
T/F: Only accounts with a balance are listed in the Trial Balance columns of a work sheet.
✔✔False
T/F: Journals, ledgers, and work sheets are considered permanent records. ✔✔False
T/F: The two accounts affected by the adjustment for supplies are Supplies and Supplies
Expense. ✔✔True
What is accrual basis of accounting? ✔✔Reporting income when it is earned and expenses
when they are incurred.
T/F: 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. ✔✔True
T/F: Making adjustments to general ledger accounts is an application of the Matching Expenses
with Revenue accounting concept. ✔✔True
T/F: Adjusting entries must be posted to the general ledger accounts. ✔✔True
A fiscal period consisting of 12 consecutive months is
___________________________________. ✔✔Fiscal Year
What is cash basis of accounting? ✔✔Reporting income when the cash is received and
expenses when the cash is paid.
T/F: 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. ✔✔False
T/F: Many businesses choose a one-year fiscal period that ends during a period of high business
activity. ✔✔False
