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