When Constructing a Work Sheet, Accounts Are Often Needed That

question 136

Multiple Choice

When constructing a work sheet, accounts are often needed that are not listed in the trial balance already entered on the work sheet from the ledger. Where should these additional accounts be shown on the work sheet?

• A) They should be inserted in alphabetical order into the trial balance accounts already given.
• B) They should be inserted in chart of account by highest dollar value.
• C) They should be inserted on the lines immediately below the trial balance totals.
• D) They should not be inserted on the trial balance until the next accounting period.

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Definitions:

Condemnation Proceeds

Financial compensation received when property is taken by a government authority through eminent domain.

Recognized Gain

The amount of profit that is realized from the sale of assets that must be reported for tax purposes.

Adjusted Basis

The original cost of a property adjusted for factors such as depreciation or improvements, used to calculate capital gains or losses for tax purposes.

Recognized Gain

The profit earned from the sale of an asset that must be reported for tax purposes.