Accounting Chapter 6 Study Guide
Terms to know:
Accrual basis of accounting:
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Adjusting entries
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Adjustments
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Balance Sheet
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Cash basis of accounting
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Fiscal period
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Fiscal year
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Income Statement
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Net income
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Net loss
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Prepaid expense
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Trial balance
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Work Sheet
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1. What accounts are listed in the trial balance columns of a worksheet?
a. All
b. Only accounts with a balance
c. Something else _______________________
2. Are adjusting entries posted to the general ledger accounts?
a. Yes
b. No
3. Do most business choose a one-year fiscal period that ends during a period of
high business activity?
a. Yes
b. No
4. How many financial statements are prepared from the information on the
worksheet?
a. 1
b. 2
c. 3
d. 4
e. Something else ____________
5. What would give you a hint that an error in the trial balance (unequal columns) is
caused by a transposed number?
a. The difference is divisible by 9
b. The credit is greater than the debit by 7
c. Something else___________________________________________
6. How does a business use the income statement to determine net income or net
loss?
a. If the debit column total is greater than the credit column total, they have a
net income
b. If the debit column total is less than the credit column total, they have a
net income
c. Something else ___________________________________________
7. How do you correct an amount being written in the incorrect column of a
worksheet
a. Erase it and put it in the correct column
b. Throw the entire worksheet away and try again
c. Something else______________________________________________
8. How do you know if the concept Consistent Reporting is being applied/
a. Records are consistent in the way that they are presented (think units)
b. Records are not consistent in the way that they are presented (units
again)
c. Something else____________________________________________
9. Supplies used during a fiscal period is:
a. An expense
b. A revenue
c. Something else_________________________________
Things you will be responsible for knowing:
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Prepare a Work Sheet Heading
Prepare a Trial Balance on the Work Sheet
Total and Rule the Trial Balance columns
Record Adjustments
Complete the Work Sheet
Journalize and Post Adjusting Entries