Ch. 10 and 11 Accounting Test
false
A check should be written before the check stub is filled out.
false
A stop payment order and voiding a check mean the same thing.
temporary accounts
Accounts that start each new accounting period with zero balances are ____. permanent accounts asset accounts liability accounts temporary accounts
true
After the closing entries have been posted, the balance in the capital account reflects the net income or net loss and the withdrawals for the period.
true
An example of an internal control is the daily deposit of cash receipts in the bank.
true
Bank service charges should be recorded in the checkbook before reconciling the bank statement.
false
Before closing entries are journalized and posted, the Income Summary account in the general ledger has a normal credit balance.
true
Cash is a business's most liquid asset.
false
Checks written in pencil are acceptable.
capital account
Closing entries are used to transfer the net income or net loss for the accounting period to the ____. Cash in Bank account expense accounts revenue account capital account
false
Closing entries transfer the net income or net loss to the withdrawals account.
false
Closing the revenue account is the second closing entry.
a debit to Income Summary, a credit to owner's capital
If a business has a net income for the period, the journal entry to close the balance of the Income Summary account is ____. a debit to owner's capital, a credit to Income Summary a debit to Fees, a credit to owner's capital a debit to Income Summary, a credit to owner's capital a debit to owner's capital, a credit to Fees.
true
If a business reports a net loss for the period, the journal entry to close the Income Summary account would be a debit to capital and a credit to Income Summary.
false
Outstanding checks and voided checks are the most frequent causes for differences between the bank statement balance and the checkbook balance.
true
Prompt reconciliation of the bank statement is a good way to guard against disorderly cash records or cash loss.
true
Revenue and expense accounts must be closed out because their balances apply to only one accounting period
true
The Income Summary account is a simple income statement in the ledger.
true
The Income Summary account is located in the owner's equity section of the general ledger.
credit side of the Income Summary account
The balance of the revenue account is transferred to the ____. debit side of the Cash in Bank account credit side of the owner's capital account credit side of the Income Summary account debit side of the owner's withdrawals account
true
The ending balance on the bank statement seldom agrees with the balance in the checkbook.
true
The last step in the accounting cycle is the preparation of the post-closing trial balance.
true
To close a revenue account, debit it for the amount of its credit balance
true
To close the withdrawals account, the amount of its balance is debited to the capital account and credited to the withdrawals account.
second closing entry
Transferring the expense account balances to the Income Summary account is the ____. first closing entry second closing entry third closing entry fourth closing entry
true
When a business receives a check in payment for a product or service, it acquires the right to that check.
false
When expense accounts are closed, the Income Summary account is credited.
klaus braun, capital
Which of the following accounts is not closed at the end of the accounting period? Fees Income Summary Maintenance Expense Klaus Braun, Capital
the income summary account is located in the owner's equity section of the general ledger
Which of the following statements is true? The Income Summary account is located in the owner's equity section of the general ledger. The Income Summary account has a normal debit balance. The Income Summary account is a permanent account. The Income Summary account is used throughout the accounting period.