All of the Following Statements Are True Regarding the Use

question 145

Multiple Choice

All of the following statements are true regarding the use of a work sheet at the end of an accounting period except:

• A) all companies use a ten-column work sheet.
• B) the net income of the period is extended from the income statement debit column to the balance sheet credit column.
• C) the beginning balance in the Retained Earnings account is entered initially on the work sheet on the unadjusted trial balance.
• D) cash is always carried over from the unadjusted trial balance columns of the work sheet to the balance sheet columns without any adjustment.

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Definitions:

Omission

The act of leaving out or neglecting to include or do something, often resulting in incomplete information or tasks.

Qualitative Characteristics

Attributes that make the information provided in financial statements useful to users, such as relevance and reliability.

Understandability

A principle in accounting that financial information should be presented in a clear and concise manner, making it easily understandable by users.

Recognition

The process of recording an accounting transaction or event in the financial statements once it meets the criteria for financial reporting.