T or F:
Both the beginning and the ending merchandise inventory amountsare posted to the income summaryaccount.
Unearned revenue is a contra-revenueaccount.
Cash received in advance for performing a service or deliveringa product is called prepaidrevenue.
The transaction to record unearned revenue results in anincrease in a liabilityaccount.
A net loss results if the total of the debit column of theBalance Sheet section exceeds the total of the credit column of theBalance sheet section.
Adjusting entries entered on the worksheet and recorded in thegeneral journal do not have to be posted to the generalledger.
A contra-cost account is given a “.1” extension to its relatedledger account’s number.
When part of the amount of unearned revenue has been earned, theunearned revenue account must beadjusted.
Both the debit and credit amounts for the income summary accountmust be extended in the worksheet.
Journalizing adjustments from the work sheet has no effect onthe actual accounts in the generalledger.
In journalizing adjusting entries, Merchandise Inventory iscredited for the amount of endinginventory.
The work sheet is a formal financialstatement.
The difference between the Income Statement and Balance Sheetdebit and credit columns on the work sheet represent the net incomeor the net loss.