Accounting Unit 2 Exam

When petty cash is replenished, the balance of the petty cash fund increases.

• True

• False

All financial statements have a 4-line heading.

• True

• False

Double lines are ruled across the balance sheet columns to show that the column totals have been verified as correct.

• True

• False

The value of prepaid insurance coverage used during an fiscal period is an expense.

• True

• False

Many businesses choose a one year fiscal period that ends during a period of high business activity.

• True

• False

If a bank does not receive payment form the person who signed the check, each endorser of the check is individually liable.

• True

• False

The balance of the supplies account plus the value of supplies on hand equals the up-to-date balance of the supplies account.

• True

• False

A source document is prepared for adjusting entries.

• True

• False

Temporary accounts are not listed on the post-closing trial balance.

• True

• False

Two financial statements are prepared from the worksheet.

• True

• False