Accounting - Preparing an 8-Column Work Sheet for a Merchandising Business

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Two accounts used in adjusting office supplies are Supplies-Office and Supplies-Inventory.

Functional depreciation should be considered in estimating the useful life of computer equipment.

The value of the insurance coverage used is recorded as a debit to Insurance Expense.

The amount recorded in Income Summary is extended to the Balance Sheet Debit or Credit column.

Estimated income tax must be paid in monthly installments.

Purchases are recorded in the merchandise inventory account.

The income summary account is one of the accounts used to adjust the merchandise inventory account at the end of a fiscal period.

The difference between an asset's account balance and its related contra account is called book value.