1. Worksheet is one of the components of financial statements.

False

2. Worksheet is an aid in the preparation of financial statements. True

3. It is not necessary to prepare formal financial statements if a worksheet has been prepared by the entity because the
balance sheet and income statement is already presented on worksheet. False

4. Journal entries are entries made at the end of the accounting period to correct the accounts. False

5. The worksheet is distributed to users of financial statements. False

6. Worksheet is very useful to management. True

7. The worksheet cannot be used as a basis for posting to ledger accounts. True

8. If credit column in the income statement of a worksheet is less than total debit columns, the entity has net income.
False

9. Post-closing trial balance have more accounts than adjusted trial balance. False

10. Real accounts are accounts that are carried over to the next accounting period. True

11. The first step in the accounting cycle is to journal the transactions. False

12. Closing entries are unnecessary if the entity will continue its business. False

13. Income summary appears in the income statements. True

14. Closing entries are made before reversing entries.

15. Reversing entry simplifies accounting and bookkeeping. True

16. Post-closing trial balance only contains real accounts. True

17. After closing entries are recorded, all real accounts have zero balance. False

18. The trial balance shows that the books are mathematically correct. True

19. The financial statement prepared to know the cash inflows and outflows of the entity is the statement of cash flows.
True

20. Worksheet is prepared after the entity made the financial statements. True

The net income is entered in the credit column of balance sheet in the worksheet. False

23. Real account is similar to permanent account. False

24. Trial balance shows that both the credit and debit amount of transaction have been recorded. True

25. Accounts that are used to report on activities related to one or more accounting periods, and whose balances are
carried over to the next accounting period is real accounts. True

26. The average time between paying cash for employee salaries or merchandise and receiving cash from customers is
called the operating cycle. True
27. Trial balance shows that there are no errors committed by the entity. True

28. The entity can prepare the trial balance at any time. False

29. The recurring steps performed each accounting period, starting with analyzing business transaction are called
accounting cycle. True

30. Unadjusted trial balance is a trial balance made after the adjusting journal entries have been recorded. False

31. Trial balance proves that there are no errors made by the entity. True

32. Trial proves that all transactions have been recorded by the entity. True

33. Trial balance can help detect errors. True

34. Worksheet is a working paper. True

35. The financial statement prepared to know the profit or loss of the business is balance sheet. False

36. A General purpose financial statements are reports that can be created from adjusted trial balance. True

37. Depreciation is subject to reversing entry. False

38. One objective of reversing entry is to simplify the bookkeeping in the next accounting period. True

39. Expenses relating to the operation of the entity is presented in the profit or loss statement.

40. To close drawing account to owner's capital, drawing account is debited. False

and Owner's capital is credited. False

41. To close net income account to owner's capital, Income summary account is debited and Owner's capital is credited.
True

42. To close expenses account to income summary, Income summary account is credit and expense account is debited.
False

43. Reversing entries are the same as an accrual entry. True

44. The final trial balance is known as adjusted trial balance. False

45. The post-closing trial balance is entered on the fifth and sixth column of the worksheet. False

46. Reversing entries are entries used to transfer nominal accounts to real accounts. False

47. Only income statements accounts are closed. True

48. The balance of capital includes the cumulative net result of income, gains, loss, expenses, and withdrawals. False

49. Balance sheet is a financial statement that is closest to the basic accounting equation. True

50. The worksheet is made after the formal financial statements are prepared. False

51. Reversing entries are optional. True

53. Statement of changes in equity has no relation with income statement. False

54. The income statement column of worksheet shows the profit or loss of the entity. True

55. Adjusting entries for doubtful accounts could be reversed. True

56. The amounts appearing on the balance sheet should be the same amounts appearing on the post-closing trial
balance. False

57. Reversing entries are made at the end of the accounting period. False

58. Statement of changes in equity provides the link between income statement and balance sheet. True

59. All adjusting entries are reversed to simplify the bookkeeping of transactions of the next accounting period. False

60. The purpose of closing entries is to help in preparing the financial statement. False

61. Adjusting entries for accrual of interest could be reversed. True

62. Adjusting entries for unearned revenue using liability method could be reversed. False

63. Adjusting entry for prepaid expense using expense method could be True

64. Purchasing of equipment is presented under financing activity of statement of cash flows. False

Worksheet 168 False

65. Owner's withdrawal account is presented in the post-closing trial balance. False

66. Statement of changes in equity shows the revenue of the entity for the year. False

67. Payment of salaries expenses is presented under investing activities of the. False

statement of cash flows.

68. Collection of service income is presented as cash inflow in the operating activities of statement of cash flows. False

69. Sales on account is presented as cash inflow in the operating activities of the statement of cash flows. True

70. The proceeds from the sale of equipment is presented as cash inflow in the operating activities section of statement
of cash flows. False

71. The primary objective of reversing entry is correct error. True

72. Owner's withdrawal is closed in the closing entries. True

73. Reversing entry is the exact opposite of the adjusting entry.. True

74. Worksheet is optional. True

75. Income summary is a temporary account used in reversing entries. True

76. Real accounts are periodically closed. False

78. The use of reversing entry is not a required step in the accounting cycle. True

79. Contra asset accounts are not reported in the financial statements. True

80. Prepayment of a company for which expense method is used can be reversed. True

81. All accruals can be reversed. True

82. Contra asset accounts have normal debit balance. False

83. In closing entries, all assets and liability accounts are closed to income summary account. False

84. After journalizing the transactions and posting all adjusting entries, a company prepared an adjusted trial balance
that is the primary basis for the preparation of worksheet. False

85. The adjusting journal entry debit Salary expense and credit Salary could be reverse. False

86. The income summary account is shown in the balance sheet. True

87. Income summary account is close to owner's drawing account. False

88. The post-closing trial balance have fewer accounts than the balance sheet. True

89. To simplify the bookkeeping of the co in the following year, all adjusting entries must be reversed. False

90. Land is a permanent account. True

91. Goodwill is a nominal account. False

92. Revenue are transferred to the credit side of the Income Summary account. False

93. Reversing entries are made only for accruals. True

94. Reversing entries may not be required by the management. True

95. Reversing entries are used to detect errors. False

96. Closing entries are prepared after reversing entries. True

97. After all closing entries are recorded and posted, the balance of the Income Summary account will be zero. True

98. Accumulated Depreciation is a permanent account. True

99. Owner's withdrawal account is a permanent account. False

100. The royalty fee account will appear in the income statement. True

1 FALSE Worksheet is only an analytical device to trace the changes in the financial accounting reports
2 TRUE It helps in financial planning as the worksheets show the accounts and cash balances it can be used to make investment decisions.
3 FALSE Preparation of Financial Statements is necessary in order for the decision makers to make a decision
4 FALSE the definition is applicable for the Correcting Entries, Journal Entries are made when the designation transactions are occur
5 FALSE Worksheet is only an aid in the preparation of Financial Statements and not distributed to the users of Financial Statements as formal reports
6 FALSE Worksheet is not very useful for the management because there are other analytical device that may become alternative use for the management
7 TRUE Posting to Ledger from the Journal which is not part of the Worksheet
8 FALSE Should be Net Loss and not Net Income. If the Credit Column of the Income Statement in the worksheet is more than the debit column, the result will be N
9 FALSE Revenue and Expense accounts are still available in the Adjusted trial balance but it is not available in the Post Closing trial Balance
10 TRUE Real Accounts are Balance Sheets accounts that are carried over for the next accounting period
11 FALSE the first step in the accounting cycle is the Analysis of Transactions
12 FALSE Closing entries are necessary step in the Accounting Cycle
13 FALSE Income Summary account are only Temporary accounts that will not be reflected in the Income Statements
14 TRUE Reversing Entries are made at the Beginning of the Next Accounting Period
15 TRUE Reversing entries simplify recordkeeping and reduce the number of mistakes in the monthly accounting process.
They are recorded in response to accrued assets and accrued liabilities created by adjusting entries at the end of the reporting period.
16 TRUE Temporary accounts are not listed in the Post Closing Trial Balance
17 FALSE After closing entries the Temporary Accounts have zero balance
18 TRUE A trial balance is a bookkeeping worksheet in which the balance of all ledgers are compiled into debit and credit account column totals that are equal.
19 TRUE Statement of Cashflows presents the information about cash inflow and outflows during the accounting period.
20 FALSE Accounting worksheets help businesses prepare those financial statements. Though they are not required
21 TRUE Temporary Accounts are Revenue, Expenses, Drawings or Dividends and Income Summary Account
22 TRUE Net income is being close to the Retained Earnings account for the Corporation and Capital accounts for the Sole proprietorship and partnership
23 TRUE Real Accounts are Balance Sheets accounts
24 FALSE Trial balance only shows the equality of the Total Debits and Total Credits
25 FALSE They are Mixed Accounts and not Real Accounts
26 FALSE Operating Cycle is from the Acquisition of inventories to the Collection of Cash from the Customers.
27 FALSE Trial balance only shows the equality of the Total Debits and Total Credits and not the accuracy of the transactions being recorded
28 TRUE Although you can prepare a trial balance at any time, you would typically prepare a trial balance before preparing the financial statements.
29 TRUE Accounting Cycle is a well defined series of steps that will beused in the preparation of Financial Statements
30 FALSE It should be before the adjusting entries have been recorded
31 FALSE Trial balance only shows the equality of the Total Debits and Total Credits and not the accuracy of the transactions being recorded
32 FALSE Even if the trial balance is balance, there still a possibility for not recording a business transaction
33 TRUE Preparing a trial balance for a company serves to detect any mathematical errors that have occurred in the double-entry accounting system.
34 TRUE One of the most common forms of working papers is a worksheet. Worksheets are used to summarize year-end accounting processes, post adjusting entrie
35 FALSE Should be Income Statements and not Balance Sheet
36 TRUE Adjusted Trial balance is very helpful in the prepation of Financial Statements because the accounts to be used is reasonably correct
37 FALSE Reversing Entries are only applicable for the Accruals and Deferrals if using Income Statement method
38 TRUE Business owners use reversing entries to neutralize journal entries prepared in the previous accounting period.
39 TRUE Revenue and Expenses are part of the Profil or Loss Statements
40 FALSE Owner's Capital should be debited and Drawing accountb should be credited
41 TRUE Net income of the company will increase the owner's capital that's why it is being credited
42 FALSE Income Summary account should be debited and expenses should be credited
43 FALSE Accrual is used to ascertained the amount of Revenue and Expenses for the period.
44 FALSE The final trial balance is the Post Closing Trial balance
45 FALSE Adjusted trial balance is entered in the fifth and sixth colum of the worksheet and not the Post closing trial balance
46 FALSE That is Closing Entries and not Reversing Entries
47 FALSE Other than Income statement accounts, Drawing account are also part of the closing process
48 FALSE Investment is also part of the Ending Capital balance of the company.
49 TRUE Balance sheet composed of Asset, Liabilities, and Equity and the Accounting Equation is Asset = Liabilities + Equity
50 FALSE Worksheet is not required in the steps of the Accounting Cycle
51 TRUE Reversing Entries are not required in the Accounting Cycle
52 FALSE Statement of Changes in Equity is related in Balance Sheet because of the Equity section of the Balance Sheet
53 FALSE Net Income is part of the Statement of Changes in Equity
54 TRUE The difference between the Debit and Credit Column of the Income Statement in the worksheet is Net Income or Net loss
55 FALSE Only Accruals and Defferals under Income Statement method are allowed for the reversing entry.
56 TRUE The accounts in the Post Closing Trial balance are balance Sheet Accounts
57 FALSE Reversing Entries are made at the Beginning of the Next Accounting Period
58 TRUE
59 FALSE Not all adjusting entries are subject for Reversing Entries
60 FALSE The purpose of Closing entries are to close the temporary or nominal accounts
61 TRUE Only Accruals and Defferals under Income Statement method are allowed for the reversing entry.
62 FALSE Deferrals under Balance Sheet method (Both Asset and Liability method) is not subject for the Reversing Entry
63 TRUE Deferrals under Income Statement method (Both Expense and Revenue method) is subject for the Reversing Entry
64 FALSE Should be under Investing Activity
65 FALSE Owner's Withdrawal is part of the closing entries
66 FALSE Revenue is presented in the Income Statements
67 FALSE Should be under Operating Activities
68 TRUE Generally, income statement accounts are under Operating Activities
69 FALSE NO Cash involved, should not be presented in the Statement of Cash Flows
70 FALSE Should be under Investing Activity
71 FALSE Primary objective is simplification of the record-keeping of the Company
72 TRUE Owner's Withdrawal is part of the closing entries
73 TRUE But not all adjusting entries are subject for reversing entries
74 TRUE Worksheet is not required in the steps of the Accounting Cycle
75 FALSE temporary accounts that is used in Closing Entries
76 FALSE Temporary accounts are the accounts periodically closed
77 TRUE Financial Statements can be prepared from the Adjusted tried balance because the Asset, liabilities, Equity, Revenue, and Expenses accounts are already re

78 TRUE
79 FALSE Contra Asset accounts are listed in the Asset section of the Balance Sheet as a deduction to the Principal Account
80 TRUE Deferrals under Income Statement method (Both Expense and Revenue method) is subject for the Reversing Entry
81 TRUE Only Accruals and Defferals under Income Statement method are allowed for the reversing entry.
82 FALSE The normal balance for the Contra Asset Account is Credit
83 FALSE Revenue and Expenses accounts closed to the Income Summary Account
84 TRUE
85 TRUE It can be reverse because this is Accrual
86 FALSE Income Summary account is not part of the balance sheet because this is part of the closing process
87 FALSE Income summary is closed to owner's capital account
88 FALSE Post Closing Trial balance accounts are also Balance sheet accounts
89 FALSE not all adjusting entries are subject for Reversing Entries
90 TRUE land is Balance sheet account
91 FALSE Goodwill is balance sheet account
92 TRUE
93 FALSE Not only accrual but also Deferrals as long as under the Income Statement method
94 TRUE reversing entries are only optional
95 FALSE Correcting entries are used to correct the errors
96 FALSE Should be before the reversing entries
97 TRUE
98 TRUE Accumulated Depreciation is Balance sheet account
99 FALSE should be Temporary Accounts
10
0 TRUE