Accounting Chapter 8 before final

after the closing entries are posted, the capital balance should be the same as shown on what financial statement that was completed in chapter 7?

Balance Sheet

What must you do to the balances in all of the expense accounts in order to prepare them for the new accounting period?

Close all expense accounts with credits.

The hournal entries that prepare temporary accounts for the next fiscal period cycle, are either the adjusting or closing entries? Which one?

Closing Entries

How do you close out a temporary account: in reference to the balance side that has a current balance?

Debit or credit the opposite of the balance. (For example: Sales has a current credit balance, Sales.)

What's the journal entry to adjust supplies

Debit: Supplies Expense; Credit: Supplies

Is there a source document prepared for adjusting or closing entries?

No, the information comes from the work sheet.

What is the normal balance side of the income summary account?

No. If there's net income, it has a credit balance. If there's net loss, it has debit balance.

The __________________ accounts are used to accumulate information from one fiscal period to the next.

Permanent

Do the permanent or temporary account balances carry over to the next fiscal period?

Permanent accounts (EX: cash)

Is income summary a permanent or temporary account?

Temporary

Is the drawing account considered a temporary or permanent account?

Temporary

At the end of the fiscal period, all of the temporary account balances are summarized and eventually transferred to what account?

The Capital account

Temporary accounts begin each new fiscal period with a _____________ balance.

Zero

A post closing trial balance simply verifies the equality of __________________and __________________ in a general ledger after the closing entries are posted.

debits and credits

After the adjusting entry for supplies has been posted, but before any closing entries are posted, the current supplies expense balance will equal the amount of supplies ____________ during the fiscal period.

that was used