Chapter 8 Test
permanent accounts
accounts used to accumulate information from one fiscal period to the next are
zero
after closing all entries the drawing account should have what kind of balance
temporary account
income summary is a
0 balance
temporary accounts begin each new fiscal period with a
assets, liabilities, and owner's capital
the accounts that appear on the post-closing trial balance
prepare a post-closing trial balance
the last step in the accounting cycle is to
debit
when the total expenses are greater than the total revenues, the income summary account has a _______ balance
John Doe, Capital
which of the following accounts is NOT closed out (Rent Expense; John Doe, Drawing; John Doe, Capital; Misc. Expense
true
(true or false) Journal entries used to prepare temporary accounts for new fiscal period are closing entries
false
(true or false) The drawing account is permanent account
true
(true or false) a post-closing trial balance verifies the equality of debits and credits in a general ledger after the closing entries are posted
false
(true or false) at the end of a fiscal period, the balances of permanent accounts are summarized and transferred to the owner's capital account
false
(true or false) balance of the liability accounts must be reduced to 0 to prepare the accounts for the next period
False
(true or false) permanent accounts are used to accumulate information until it is transferred to the owner's capital account
true
(true or false) temporary accounts are called nominal accounts
false
(true or false) temporary accounts include assets, expenses, and owner's drawing account
true
(true or false) temporary accounts must start each fiscal period with a zero balance
True
(true or false) the ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period
false
(true or false) the income summary account has a normal debit balance
true
(true or false) the series of accounting activities included in recording financial information for a fiscal period is calling an accounting cycle
true
(true or false) to close temporary account, an amount equal to its balance is recorded in the account on the opposite to its balance