College Accounting Ch 6 Test

One purpose of closing entries is to give zero balances to?

Revenue and expense accounts

Which of the following accounts would be closed?

Supplies Expense

After the closing entries are posted to the ledger, each revenue account will have?

a zero balance

All of the following accounts will appear on the postclosing trial balance except?

depreciation expense-equipment

The entry to close the Accumulated Depreciation account may include a debit to?

none of these

The entry to close the owner's drawing account may include a debit to the?

owner's capital account and a credit to the owner's drawing account

Which of the following statements is correct?

preparation of the postclosing trial balance is the last step in the end of period routine

After the worksheet has been completed, the next step in the accounting cycle is to?

prepare the financial statements

After the data about transactions have been posted, the next step in the accounting cycle is to?

prepare the worksheet

After the closing entries are posted to the ledger, each expense account will have?

A zero balance

The entry to close an expense account requires a credit to the Income Summary account.

False

The entry to transfer net income to the owner's capital account would include a debit to the owner's capital account.

False

The owner's capital account is closed at the end of each accounting period.

False

"After-closing trial balance" is another name for the postclosing trial balance.

True

"Income and Expense Summary" is another name for the Income Summary account.

True

'Closing" is written in the Description column of the individual revenue and expense accounts in the general ledger.

True

A compound entry in the general journal is made to close expense accounts.

True

After the closing entries are posted, the balance of the owner's capital account agrees with the amount of owner's equity shown on the balance sheet for the period.

True

Interpreting the financial statements is the last step in the accounting cycle.

True

One of the purposes of closing entries is to transfer net income or net loss for the period to the owner's capital account.

True

The entry to close the revenue account Fees Income requires a debit to that account.

True

The heading "Closing Entries" is usually written in the Description column of the general journal above the first closing entry.

True

The postclosing trial balance contains balance sheet accounts only.

True

The temporary owner's equity accounts are closed because they apply to only one accounting period.

True

Withdrawals by the owner for personal use do not affect net income or net loss of the business.

True

The entry to close the Income Summary account may include?

a debit to income summary and a credit to the owner's capital account

Which of the following statements is not correct? (1)

at the end of each accounting period, asset and liability account balances are reduced to zero

Which of the following accounts is not closed?

cash

A postclosing trial balance could include all of the following except the?

fees income account

The revenue account Fees Income is closed by debiting?

fees income and crediting income summary

Information in the financial statements provides answers to many questions, including:

how much do customers owe the business?

The asset, liability, and owner's capital accounts appear on all of the following except the?

income statement

Which of the following accounts is a permanent account?

supplies

Which of the following statements is not correct? (2)

the balance of the owner's capital account, as reflected on the postclosing trial balance, will match the amount reported on the income statement

The entry to close the Depreciation Expense account may include a debit to?

the income summary account and a credit to the depreciation expense account.

Which of the following accounts will not normally have a zero balance after the closing entries have been posted?

the owner's capital account

The entry to transfer a net loss to the owner's capital account would include a debit to?

the owner's capital account and a credit income summary

The owner's drawing account is closed by debiting?

the owner's capital account and crediting the owner's drawing account

Which of the following statements is not correct?

the owner's drawing account is closed to the income summary statement

One purpose of closing entries is to?

transfer the results of operations to owner's equity