Important Terms
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
worksheet
Where are the amounts in the trial balance columns copied from? (not the textbook)
General ledger
How many financial statements do we prepare from a worksheet?
Two (Balance sheet and Income statement)
When an error is found while making a worksheet, can it be erased and corrected?
Yes. A worksheet is not a permanent record. You can erase and change things.
True or false. A company should choose to end their fiscal period during a time of low-activity for the business.
True
the length of time for a which a business summarizes and reports financial information
fiscal period
What does a double rule under a trial balance represent?
Debits and credits balance
The balance of the supplies account minus the value of the supplies actually on hand should equal what?
The amount of the adjustment OR the amount of supplies used during that fiscal period.
On the worksheet, the account Owner's Capital, Eric Smith, would be extended to which specific column?
Balance sheet - Credit
What three headings go at the top of a worksheet and in what order?
Name of Company
Worksheet
For (Period) Ended (Date)
Changes recorded on a worksheet to update general ledger accounts at the end of a fiscal period
adjustments
True or false. In a trial balance all accounts are listed even if they have no balance.
True
On a worksheet, the sales account gets extended to which specific column?
Income Statement - Credit
On a worksheet, an adjustment to the Supplies Expense account is listed in which column?
Adjustments - Debit
Adjustments to general ledger accounts at the end of a fiscal period is an example of which accounting concept?
Matching expenses with revenue
a financial statement that reports assets, liabilities, and owner's equity on a specific date
balance sheet
If the trial balance columns are not equal and the difference amount is divisible by two, what is a possible error?
The amount was written in the wrong column. (For example, cash is written as $75 credit. This would make the debit total short $75 and the credit column over $75 making a difference of $150.)
A net income is listed in two places on the worksheet. In which two columns does it get recorded?
Income Statement Debit and Balance Sheet Credit
When the Income Statement Debit column total is greater than the Income Statement Credit column total, the business has a Net ______________.
Loss
Following the same accounting procedures in the same way in each accounting period is an application of which accounting concept?
Consistent Reporting
a financial statement showing the revenue and expenses for a fiscal period
income statement
If the trial balance columns are not equal and the difference is 1 or 10 or 0.1, the error is probably with what?
Addition, entering into the calculator wrong
The book lists 4 main reasons that accounts use a worksheet. Name 1 of them.
1. To summarize general ledger account balances to prove that debits equal credits.
2. To plan needed changes to general ledger accounts to bring account balances up to date (adjustments)
3. To separate general ledger account balances according to the financial statements to be prepared.
4. To calculate the amount of net income or net loss for a fiscal period.
There are four questions we ask ourselves when creating an adjustment. What are three of those four questions?
1. What is the balance of the account?
2. What should the balance be for the account?
3. What must be done to correct the account balance?
4. What adjustment is made?
Reporting changes in financial information for a specific period of time in the form of financial statements in an application of which accounting concept?
Accounting Period Cycle