Review Chapter 7

Reporting changes in financial information for a specific period of time in the form of financial statements is an application of the accounting concept

• a. Matching Expenses with Revenue.
• b. Accounting Period Cycle.
• c. Consistent Reporting.
• d. Going Concern.

On a trial balance,

• a. all general ledger account titles are listed.
• b. only general ledger accounts that have balances are listed.
• c. only accounts with debit balances are listed.
• d. only accounts with credit balances are listed.

If a pair of work sheet columns do not balance and the difference between the totals is an amount that appears elsewhere on the work sheet, the error is probably

• a. an error in addition.
• b. an amount that has been written in the wrong column.
• c. an amount that has not been extended.
• d. a slide.

Following the same accounting procedures in the same way in each accounting period is an application of the accounting concept

• a. Matching Expenses with Revenue.
• b. Accounting Period Cycle.
• c. Consistent Reporting.
• d. Going Concern.

On a work sheet, the balance of an expense account is extended to the

• a. Balance Sheet Debit column.
• b. Balance Sheet Credit column.
• c. Income Statement Debit column.
• d. Income Statement Credit column.

Recording revenue from business activities and expenses associated with earning that revenue in the same accounting period is an application of the accounting concept

• a. Matching Expenses with Revenue.
• b. Accounting Period Cycle.
• c. Consistent Reporting.
• d. Going Concern.

A net loss is entered in the work sheet's

• a. Income Statement Debit and Balance Sheet Credit columns.
• b. Income Statement Credit and Balance Sheet Debit columns.
• c. Balance Sheet Debit and Trial Balance Credit columns.
• d. Income Statement Debit and Trial Balance Credit columns.

If the Trial Balance columns are not equal and the difference is I, the error often is

• a. transposed numbers or a "slide. "
• b. in writing an amount in the wrong column.
• c. in posting.
• d. in addition. A balance sheet has three sections: heading, assets, and liabilities.

A balance sheet had three sections: heading, assets, and liabilities.

• True
• False

The owner's capital amount reported on a balance sheet is calculated as: capital account balance plus drawing account balance less net income. The formula for calculating net income is: total revenue minus total expenses equals net income.

• True
• False