Accounting Chapter 8 Study Guide
8
A post-closing trial balance of the general ledger is prepared.
post-closing trial balance
A trial balance prepared after the closing entries are posted.
4
A work sheet, including a trial balance, is prepared from the general ledger.
yes
Accounts Payable - Suburban Office Supplies
yes
Accounts Receivable--Imagination Station
permanent accounts
Accounts used to accumulate information from one fiscal period to the next.
temporary accounts
Accounts used to accumulate information from one fiscal period to the next.
6
Adjusting and closing entries are journalized from the work sheet.
7
Adjusting and closing entries are posted to the general ledger.
160
Adjusting entry for Prepaid Insurance--which account is the credit?
520
Adjusting entry for Prepaid Insurance--which account is the debit?
150
Adjusting entry for Supplies--which account is the credit?
550
Adjusting entry for Supplies--which account is the debit?
no
Advertising Expense
the cost of the supplies on hand at the end of the fiscal period
After adjusting entries are posted, the supplies account balance will be equal to
shown on the balance sheet for the fiscal period
After the closing entries are posted, the owner's capital account balance should be the same as
yes
Cash
310
Closing entry for Income Summary with a net income (recording a net income) - which account is the credit?
330
Closing entry for Income Summary with a net income (recording a net income) - which account is the debit?
330
Closing entry for Income Summary with a net loss (recording a net loss) - which account is the credit?
310
Closing entry for Income Summary with a net loss (recording a net loss) - which account is the debit?
330
Closing entry for Sales - which account is the credit?
410
Closing entry for Sales - which account is the debit?
510 520 550
Closing entry for all expense accounts - which account(s) is the credit?
330
Closing entry for all expense accounts - which account(s) is the debit?
320
Closing entry for owner's drawing account - which account is the credit?
310
Closing entry for owner's drawing account - which account is the debit?
5
Financial statements are prepared from the work sheet.
no
Income Summary
a temporary account
Income Summary is
work sheet's Adjustments columns
Information needed for journalizing the adjusting entries is obtained from the
work sheet's Income Statement and Balance Sheet columns
Information needed for recording the closing entries is obtained from the
no
Insurance Expense
yes
J. Nichols, Capital
no
J. Nichols, Drawing
3
Journal entries are posted to the general ledger.
adjusting entries
Journal entries recorded to update general ledger accounts at the end of a fiscal period.
closing entries
Journal entries used to prepare temporary accounts for a new fiscal period.
no
Miscellaneous Expense
yes
Petty Cash
yes
Prepaid Insurance
no
Rent Expense
no
Sales
1
Source documents are checked for accuracy, and transactions are analyzed into debit and credit parts.
yes
Supplies
Use the partial chart of accounts given below. For each adjusting or closing entry described, decide which accounts are debited and credited. Write the account numbers identifying your choice in the proper Answer column.
Supplies 150 Prepaid Insurance 160 J. Nichols, Capital 310 J. Nichols, Drawing 320 Income Summary 330 Sales 410 Advertising Expense 510 Insurance Expense 520 Supplies Expense 550
no
Supplies Expense
general ledger accounts with balances after the closing entries are posted
The accounts listed on a post-closing trial balance are
accounting cycle
The series of accounting activities included in recording financial information for a fiscal period.
2
Transactions, from information on source documents, are recorded in a journal.
no
Utilities Expense
Accounting Period Cycle
Which accounting concept applies when a work sheet is prepared at the end of each fiscal cycle to summarize the general ledger information needed to prepare financial statements?
Matching Expenses with Revenue
Which accounting concept applies when expenses are reported in the same fiscal period that they are used to produce revenue? (p. 206)
