Chapter 8 Accounting T/F

At the end of a fiscal period, the balances of permanent accounts are summarized and transferred to the owner's capital

False

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

False

Temporary accounts include: assets, expenses, and the owner's drawing account

False

The Income Summary account has a normal debit balance

False

The balances of the liability accounts must be reduced to zero to prepare the accounts for the next period

False

The drawing account is a permanent account

False

A post-closing trial balance verifies the equality of debits and credits in a general ledger after closing entries

True

Ending account balances of permanent accounts for one fiscal period are the beginning account balances for the nxt perid

True

Journal entries used to prepare temporary accounts for a new fiscal period are closing entries

True

Temporary accounts are called nominal accounts

True

Temporary accounts must start each fiscal period with a zero balance

True

The capital account's new balance after all closing entries are posted is verified by comparing it to the balance sheet

True

The series of accounting activities included in recording financial information for a fiscal period is called acct cycle

True

To close a temporary account, an amount equal to its balance is recorded in the account on the side opposite its balance

True