Chapter 6 - True/False

The accounting concept Consistent Reporting is being applied when a delivery business reports revenue for the number of deliveries made one year and the amount of revenue received for the deliveries made the next year.

• True

• False

An accounting period is also known as a fiscal period.

• True

• False

Journals, ledgers, and work sheets are considered permanent records.

• True

• False

All general ledger account titles are listed on a trial balance in the same order as listed on the chart of accounts.

• True

• False

the four questions asked when analyzing an adjustment are: Why? Where? When? and How?

• True

• False

The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense.

• True

• False

The two accounts affected by the adjustment for insurance are Prepaid Insurance Expense and Insurance.

• True

• False

Totaling and ruling the Adjustments columns of a work sheet are necessary to prove the equality of debits and credits.

• True

• False

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

• True

• False

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

• True

• False