| A | B |
|---|
| An equation showing the relationship among assets, liabilities, and owner's equity | accounting equation |
| A business paper from which information is obtained for a journal entry | source document |
| A business that performs an activity for a fee | service business |
| A columnar accounting form used to summarize the general ledger information needed to prepare financial statements | work sheet |
| Journal entries used to prepare temporary accounts for a new fiscal period | closing entries |
| Transferring information from a journal entry to a ledger account | posting |
| A proof of the equality of debits and credits in a general ledger | trial balance |
| A business owned by one person | proprietorship |
| A trial balance prepared after the closing entries are posted | post-closing trial balance |
| Accounts used to accumulate information until it is transferred to the owner's capital account | temporary accounts |
| An accounting device used to analyze transactions | T account |
| A financial statement that reports assets, liabilities, and owner's equity on a specific date | balance sheet |
| A list of accounts used by a business | chart of accounts |
| An increase in owner's equity resulting from the operation of a business | revenue |
| Journal entries recorded to update general ledger accounts at the end of a fiscal period | adjusting entries |
| The posting reference should always be recorded in the journal's Post. Ref. column before amounts are recorded in the ledger: | false |
| Blank endorsements should be used when sending checks through the mail | false |
| When the petty cash fund is replenished, the balance of the petty cash account increases | false |
| Making adjustments to general ledger accounts is an application of the Matching Expenses with Revenue accounting concept | true |
| The value of the prepaid insurance coverage used during a fiscal period is an expense | true |
| Net income on a work sheet is calculated by subtracting the Income Statement Credit column total from the Income Statement Debit column total | false |
| The formula for calculating the total expenses component percentage is total expenses divided by total sales equals total expenses component percentage | true |
| The current capital to be reported on a balance sheet is calculated as the capital account balance plus net income equals current capital | false |
| Temporary accounts must start each fiscal period with a zero balance | true |
| The balances of the expense accounts must be reduced to zero to prepare the accounts for the next fiscal period | true |
| The last step in the posting procedure is writing | writing the account number |
| An account number in the journal's Post. Ref. column shows | the account to which an amount is posted |
| A petty cash fund is always replenished | at the end of the month |
| The bank statement shows an account balance of $5,500.00. There are outstanding checks totaling $600.00 and an outstanding deposit of $400.00. The adjusted bank balance should be | $5,300.00 |
| On a work sheet, the balance of the Sales account is extended to the | Income Statement Credit column |
| A net loss is entered in the work sheet's | Income Statement Credit and Balance Sheet Debit columns |
| Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept | accounting period cycle |
| The journal entry to adjust Supplies is | debit Supplies Expense; credit Supplies |
| After the adjusting entry for Supplies has been posted, Supplies Expense has an up-to-date balance that is the | value of supplies used during the fiscal period |
| The journal entry to close Sales is | debit Sales; credit Income Summary |
| The journal entry to close the expense accounts is | debit Income Summary for the total expenses; credit each expense account |
| An endorsement on the back of a check indicating that the check is to be accepted for deposit only is a | restrictive endorsement |
| The entry to establish a $200.00 petty cash fund is | debit Petty Cash, $200.00; credit Cash, $200.00 |
| The formula for calculating the net income component percentage is | net income divided by total sales equals net income component percentage |
| Following the same accounting procedures in the same way in each accounting period is an application of the account concept | Consistent Reporting |
