Accounting 1 Ch 3 P 3 SB

The entries to close the revenue and expense accounts for Jefferson Company are shown below. The next closing entry in the closing process would include:

-A debit to Income Summary for $7,100. -A credit to the Retained Earnings account for $7,100.

Describe the general ledger after adjusting and closing entries have been posted.

-All expense accounts will show a $0 balance after closing. -The Dividends account will have a $0 balance after closing. -The abbreviations "adj." and "clos." have been entered in the explanation columns of the ledger. -The Income Summary account will show three closing entries.

Describe your understanding of the closing process by identifying the correct steps below.

-Close the Income Summary account. -Close the Dividends account. -Close all expense accounts. -Close all revenue accounts.

At year-end, ABC Company is beginning its closing process. Use the following account balances to demonstrate the closing of its revenue accounts.

-Debit to Consulting Revenue for $12,000. -Debit Service Fees for $15,000. -A credit to Income Summary for $27,000.

In preparing a post-closing trial balance, which of the following statements are correct?

-The retained earnings account on the post-closing trial balance will include the net income or net loss for the period. -The total of all debit balances will equal the total of all credit balances. -All permanent accounts with a balance in the general ledger will be included.

Explain your understanding of the closing process by choosing the correct statements below.

-the closing process resets the balances in temporary accounts to zero. -the closing process helps to summarize a period's revenues and expenses.

Some of the steps in the accounting cycle are listed below. Place them in the correct order of use.

1. Journalize transactions into the journal 2. Journalize and post the adjusting entries 3. Prepare the adjusted trial balance 4. Prepare the financial statements 5. Journalize and post closing entries 6. Prepare post-closing trial balance

At year-end, Zagnut Company is beginning its closing process. Use the following account balances to demonstrate the closing of its expense accounts.

A debit to Income Summary for $1,600. Credit to Supplies Expense for $700. Credit Insurance Expense for $900.

Which of the statements below is correct regarding the difference between a temporary account and a permanent account?

A temporary account will not appear on a post-closing trial balance.

When does the closing process take place?

At the end of an accounting period

Summarize the closing process by listing the closing entries in the order in which they would occur at the end of the accounting period. Step 1: Close Income Statement (credit/debit) __________ balance accounts. Step 2: Close Income Statement (credit/debit) __________ balance accounts. Step 3: Close (income summary/dividends) __________. Step 4: Close (income summary/dividends) ___________.

Blank 1: credit Blank 2: debit Blank 3: income summary Blank 4: dividends

The journal entry to close all of a company's expense accounts would include a __________ (debit/credit) to each of the expense accounts and a corresponding __________ (debit/credit) to the Income __________ (statement/summary) account.

Blank 1: credit Blank 2: debit Blank 3: summary

A post-closing trial balance is a list of __________ (permanent/temporary) accounts and their balances from the __________ (journal/ledger) __________ (after/before) all __________ (adjusting/closing) entries have been journalized and posted.

Blank 1: permanent Blank 2: ledger Blank 3: after Blank 4: closing

Closing means to transfer account balances from __________ (asset/liability/permanent/temporary) accounts so that they will start with a ___________ (contra/larger/zero) balance at the beginning of the next period.

Blank 1: temporary Blank 2: zero

Choose the statement below that explains what "closing" means.

Closing means to bring an account balance to zero.

A company had the following selected balances: Account | Debit | Credit Service Revenue $8,000 Rental Revenue $2,000 Wages Expense $500 Utilities Expense $100 The third closing journal entry, after closing revenues and expenses, would include which of the following?

Debit Income Summary $9,400; and credit Retained Earnings $9,400.

At year-end, ABC Company is completing its closing process. Use the following account balances to demonstrate the closing of the Dividends account.

Debit Retained Earnings $500. Credit Dividends for $500.

Step 1 of the closing process

Identify accounts to be closed.

Select the statement below that describes a post-closing trial balance.

It is a listing of all permanent accounts and their balances after closing.

Step 2 of the closing process

Journalize and post closing entries.

Step 3 of the closing process

Prepare a post closing trial balance.

Select the statement below that explains how to use the Income Summary account

The Income Summary account is used during the closing process to facilitate the closing of revenue and expense accounts.

Select the statement below that explains how to use the Income Summary account.

The Income Summary account is used during the closing process to facilitate the closing of revenue and expense accounts.

Which of the following lists steps of the accounting cycle in the correct order (note that not all steps are listed)?

Trial balance, Adjusting journal entries, Post-closing trial balance.

Demonstrate your knowledge of preparing a post-closing trial balance by selecting the accounts below that would be included on it.

-Liability accounts -Asset accounts -Permanent accounts

Select the statements below that describe the purpose of a post-closing trial balance.

-One purpose is to verify that all temporary accounts have zero balances. -One purpose is to verify that total debits equal total credit for permanent accounts.

Which statements below are true regarding permanent and temporary accounts?

-Permanent accounts are reported on the balance sheet. -Permanent accounts will appear on a post-closing trial balance. -Temporary accounts have a balance for one period only. -Retained Earnings is a permanent account, but Dividends is a temporary account. -Temporary accounts are reported on the income statement.

A company had the following selected balances: Account | Debit | Credit Service Revenue. $4,000 Rental Revenue $2,000 Wages Expense $500 Utilities Expense $100 Dividends $80 The first closing journal entry would include which of the following?

A credit to Income Summary for $6,000.

The Income Summary account is __________ (debited/credited) for the sum of all revenue accounts and is __________ (debited/credited) for the sum of all expense accounts and its balance will be transferred to the ___________ (Retained Earnings/Cash) account.

Blank 1: credited Blank 2: debited Blank 3: retained earnings

The closing process takes place at the __________ (end/beginning) of an accounting period, after the __________ (adjusted/unadjusted) trial balance is prepared and __________ (after/before) the financial statements are prepared.

Blank 1: end Blank 2: adjusted Blank 3: after

The purpose of the closing process is to reset ___________ (temporary/permanent) account balances to zero and to transfer the changes in all of these accounts to the Retained __________ (Earnings/Summary/Withdrawal) account.

Blank 1: temporary Blank 2: earnings

Identify which of the following steps in the accounting cycle is optional.

Reversing journal entries