The Balance Sheet Columns on the Worksheet Prepared for Boston

question 104

Multiple Choice

The balance sheet columns on the worksheet prepared for Boston Foods had subtotals as follows: debit column, $11,000, and credit column, $10,400. This information indicates that

• A) the company incurred a net income of $600.
• B) the company incurred a net loss of $600.
• C) an error was made when preparing the adjustments in the worksheet.
• D) a mathematical error was made in the worksheet.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances to reflect accrued incomes and expenses for the period.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the owner's claim on the business resources.

Net Income

The conclusive financial gain of a company upon subtracting every expense and tax from its total sales revenue.

Owner Drawings

Withdrawals of cash or other assets from a company by the owner for personal use.