Accounting Part 1 Chapter 8

When you have two credits... Do you add or subtract?

Add

When you have two debits... Do you add or subtract?

Add

what do you do in the journal and general ledger when posting?

DO NOT FORGET TO POST REF!!!!!!

post-closing trial balance: define

a trial balance prepared after the closing entries are posted

temporary accounts

accounts used to accumulate information until it is transferred to the owner's capital account

journalizing closing entries

put the date and sales on first-line on the next line put income summary then on the next line put the date and income summary next list all the expenses if it is a net income, after listing all expenses put the date and income summary then put the capital if it is a net loss, after listing all expenses put the date and capital then put income summary after you do the net income or net loss, you put the date and capital then drawing lastly, put in all the numbers from the worksheet.

Post-closing Accounts

select capital and everything above do NOT select drawing and anything below drawing

When you have a debit and a credit...Do you add or subtract?

subtract

post-closing trial balance

use the gender ledger and add up to make totals

After the closing entries are posted, the owner's capital account balance should be the same as shown (A) on the balance sheet for the fiscal period. (B) in the work sheet's Balance Sheet Debit column. (C) in the work sheet's Balance Sheet Credit column. (D) in the work sheet's Income Statement Debit column.

A

The accounts that appear on the post-closing trial balance are (A) assets, liabilities, and owner's capital. (B) revenue, expenses, and owner's drawing. (C) all accounts in the chart of accounts. (D) all temporary accounts.

A

Accounts used to accumulate information from one fiscal period to the next are (A) revenue accounts. (B) permanent accounts. (C) temporary accounts. (D) expense accounts.

B

After closing entries are posted, the balance in the owner's drawing account should be (A) a debit. (B) zero. (C) a credit. (D) none of these.

B

When the total expenses are greater than the total revenues, (A) the Income Summary account has a credit balance. (B) the Income Summary account has a debit balance. (C) debits equal credits. (D) none of these.

B

Temporary accounts begin each new fiscal period with a (A) debit balance. (B) credit balance. (C) zero balance. (D) balance equal to the net income.

C

The journal entry to close Income Summary when there is a net income is (A) debit Sales; credit Income Summary. (B) debit owner's capital; credit Income Summary. (C) debit owner's capital; credit Sales. (D) debit Income Summary; credit owner's capital

D

The last step in the accounting cycle is to (A) record transactions in a journal. (B) prepare a work sheet. (C) journalize and post closing entries. (D) prepare a post-closing trial balance.

D

Accounting Cycle

The series of accounting activities included in recording financial information for a fiscal period

closing entries

journal entries used to prepare temporary accounts for a new fiscal period

Income Summary is a(n) (A) asset account. (B) liability account. (C) temporary account. (D) permanent account.

C