1. T/F The two accounts affected by the adjustment for insurance are prepaid insurance and insurance expenses
2. T/F The two accounts affected by the adjustment for supplies are supplies and supplies expense.
3. T/F The work sheer is a temporary accounting form and can be prepared in pencil.
4. A net loss results when the total revenue is greater than the total expenses.
5. T/F The account balance for cash account is recorded in the Trial Balance Credit column and extended to the Balance Sheet Credit columns.
6. T/F The sales account balance is recorded in the Trial Balance Credit column and extended to the Balance sheet credit columns
7. T/F All financial statements have three-line headings.
8. T/F To determine the net income, this calculation is used:
TOTAL REVENUE-TOTAL EXPENSES= NET INCOME
9. T/F The amount of current capital is calculated as follows:
CAPITAL ACCOUNT BALANCE+NET INCOME-DRAWING ACCOUNT BALANCE=CURENT CAPITAL
10. T/F The two kinds of equities reported on the income statement are liabilities and owner’s equity.
11. T/F The balance sheet reports information about the elements in the accounting equation.
12. T/F The owners drawing account is closed to the owners capital account.
13. T/F A balance sheet is a financial statement that reports assers, liabilities, and owners equity on a specific date.
14. T/F The income summary account is a temporary account that does not have a normal balance
15. T/F The temporary accounts are reduced to zero at the end of each fiscal period.
16. T/F Temporary accounts with zero balances are listed on the post-closing trial balance.
17. T/F All balances sheet accounts are closed to the income summary account.
18. T/F The information needed to prepare a balance sheet is obtained from a work sheet’s Account Title column and the Balance Sheet columns.
19. T/F Reporting revenue earned and the expenses incurred to earn that revenue in the same fiscal period is an application of the accounting concept” Matching Expenses with Revenue”
20. T/F Expense accounts are closed by posting a credit to each expense account and debiting the income summary for the total of all expense account balances.