Chapter 6

Reporting income when it is earned and expenses when they are incurred

• adjusting entires
• cash basis of accounting
• accrual basis of accounting
• work sheet

The difference between total revenue and total expenses when total expenses are greater

• net loss
• net income
• trial balance
• balance sheet

Adjusting entries must be posted to the general ledger accounts

• true
• false

Net income on a work sheet is calculated by subtracting the income statement debit column total from the income statement credit column total

• true
• false

The amount of supplies used during a fiscal period is an expense

• true 
• false

What goes on line three of the heading on a work sheet?

• For Month Ended (date)
• Date
• Work Sheet
• Company Name

Which account extends to the income statement?

• Supplies
• Supplies Expense
• Cash 
• Drawing

Which account extends to the balance sheet?

• Capital
• Sales
• Rent Expense
• Utilities Expense

What is the account debited when journalizing the adjusting entry for insurance?

• Prepaid Insurance
• Insurance Expense
• Insurance
• Insurance left over

What is the account credited when journalizing the adjusting entry for supplies?

• Supplies
• Supplies Expense
• Cash
• Sales