TRUE OR FALSE 1.A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet. 2.If a worksheet is used, financial statements can be prepared before adjusting entries are journalized. . 3.If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net income. 4.The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet. 5.The adjusted trial balance columns of a worksheet are obtained by subtracting the adjustment columns from the trial balance columns. 6.It is not necessary to prepare formal financial statements if a worksheet has been prepared because financial position and net income are shown on the worksheet. 7.The balance of the depreciation expense account will appear in the income statement debit column of a worksheet. 8.After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances. 9.Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year. 10.The owner's drawing account is closed to the Income Summary account in order to properly determine net income (or loss) for the period. 11.Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure. 12.Closing the drawing account to Capital is not necessary if net income is greater than owner's drawings during the period. 13.The owner's drawing account is a permanent account whose balance is carried forward to the next accounting period. 14.Closing entries are journalized after adjusting entries have been journalized. 15.The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance. 16.The post-closing trial balance is entered in the first two columns of a worksheet. 17.A business entity has only one accounting cycle over its economic existence. 18.The accounting cycle begins at the start of a new accounting period. 19.Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account. 20.Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
TRUE OR FALSE
1.A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet.
2.If a worksheet is used, financial statements can be prepared before
3.If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net income.
4.The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.
5.The adjusted
6.It is not necessary to prepare formal financial statements if a worksheet has been prepared because financial position and net income are shown on the worksheet.
7.The balance of the depreciation expense account will appear in the income statement debit column of a worksheet.
8.After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.
9.Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year.
10.The owner's drawing account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.
11.Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.
12.Closing the drawing account to Capital is not necessary if net income is greater than owner's drawings during the period.
13.The owner's drawing account is a permanent account whose balance is carried forward to the next accounting period.
14.Closing entries are journalized after adjusting entries have been journalized.
15.The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.
16.The post-closing trial balance is entered in the first two columns of a worksheet.
17.A business entity has only one accounting cycle over its economic existence.
18.The accounting cycle begins at the start of a new accounting period.
19.Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.
20.Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
