Question Details

ACCT/510 ACCT510 ACCT 510 CHAPTER 4 TRUE-FALSE STATEMENTS PART 2



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. 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.


5. The adjustments on a worksheet can be posted directly to the accounts in the ledger from
the worksheet.


6. The adjusted trial balance columns of a worksheet are obtained by subtracting the
adjustment columns from the trial balance columns.


7. The balance of the depreciation expense account will appear in the income statement
debit column of a worksheet.


8. Closing entries are unnecessary if the business plans to continue operating in the future
and issue financial statements each year.


9. The owner's drawing account is closed to the Income Summary account in order to
properly determine net income (or loss) for the period.


10. After closing entries have been journalized and posted, all temporary accounts in the
ledger should have zero balances.


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.


Completing the Accounting Cycle 4 - 5


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.