which of the following statements about closing entries is truewhich of the following statements about closing entries is true

Is this statement correct or not? B. Sales Discount b. The balance sheet will report retained earnings of $23,500 after the closing entries have been posted to the ledger accounts only if this is the company's first year of operations. Select the best answer the multiple-choice question below. Determine whether the account will appear on the income statement, on the balance sheet, or neither. Laker Incorporated's fiscal year-end is December 31, 2021. The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? True or false? Which accounts are closed at the end of an accounting period? c. Dividends. Why do certain accounts get closed out at the end of the year or a period (versus other accounts that do not)? Zero out the revenues, expenses, and dividends. A debit to Cash and a credit to Land d) expenses account. 3) Dividends. a. Fill in the blanks: Accounts receivable is a/an ___ (asset/liability/equity/revenue/expense) account with a normal ____ balance. Test your understanding with practice problems and step-by-step solutions. no entry is required until the employee is paid next period. The first of the year-end closing entries should include which of the following line items? Income Summary is a permanent account only used for the closing process. 2) Fees Earned. Explanation a. 3 James Jaillet. Accumulated Depreciation. On December 31, 2017, Amazon posted $16,047 million of inventory. The data from the temporary accounts (revenues, expenses, and dividends) must be moved into the retained earnings account. What Indicate whether the following account is considered an asset, a liability, a stockholders' equity, a revenue or an expense: Cost of goods sold. Salaries Expense | 500. Fees Earned C. Prepaid Insurance D. Insurance Expense. True or false? Which of the following accounts would not be included in the closing entries? Prepare financial statements Step 1: Analyze and record transactions Closing entries deal primarily with the balances of real accounts. True or false? On November 1, Year 1, Shumate Company paid $1,200 in advance for an insurance policy that covered the company for six months. Multiple Choice b. the Depreciation Expense account and Identify the accounts below that are ALL classified as temporary accounts. Amazon increased its inventories by $4,586 million in 2017 to come to the balance it reported on December 31, 2017. Total liabilities are overstated by $200. Explanation Total revenues for the period are $74,200, total expenses are $49,300, and dividends are $16,600. The following account balances were taken from the adjusted trial balance of Kendall Company: Is the Income Summary a temporary or permanent account? Test your understanding with practice problems and step-by-step solutions. Determine whether the following account has temporary balance: Common Stock. debit to Salaries Expense and credit to Salaries Payable. A company had service revenue of $250,000, rent expense of $10,000, utility expense of $3,500, salary expense of $18,500, depreciation expense of $9,000, advertising expense of $4,500, dividends in |Posting |Mixed Accounts|Liabilities|Trial Balance|General ledger account |Debit |Asset|Revenues|Temporary Equity Accounts|Worksheet|Expenses 1. Salaries Payable | 500 A debit to Land and a credit to Cash. What should be the closing entry? Interest Expense |750 The worksheet for Adams Company shows the following in the financial statement columns. The entry to close dividends would include a debit to: a. dividends and a credit to income summary. True or false? Service revenue = $25,000 b. Crediting an asset (Cash) instead of crediting a liability (Interest Payable) would understate total assets and understate total liabilities. On August 1, 2012, Ken Wade created. Journalize the entry to record the cash receipts and cash sales. Assets increase and stockholders' equity decreases. [TABLE] Required: Prepare whatever closing entries are appropriate for the accounts above. Retained earnings will increase by $2,550. Prepaid Rent, $300; Rent Expense, $900 The amounts reported on the financial statements will not be affected by the closing entries. The entry to close the Income Summary account would include a: A. debit to M. Smuts Capital, $6,000 B. credit to M. Smuts Capital, $6,000 C. debit to Income How do you close a revenue account? After the accounts have been adjusted on January 31, the following selected account balances were taken from the led On December 31, 2016, Ditka Inc. had Retained Earnings of $285,800 before its closing entries were prepared and posted. A closing entry is a journal entry that is made at the end of an accounting period to transfer balances from a temporary account to a permanent account. Which of the following statements regarding closing entries is true? When an amount is paid for future rent or insurance services, a firm that is using the cash basis debits an expense account while a firm that is using the accrual basis debits an asset account." Mikaela Mundt invested $2,000 of her own money in her business. Utilities Expense B. The following information is provided for Sacks Company before closing entries. Prepare the general journal entry to record th All general ledger accounts are adjusted and closed at the end of the accounting cycle. Select one: A. The balance in the retained earnings account in the trial balance will equal the retained earnings balance on the balance sheet only after closing entries have been posted to the general ledger. (a) True (b) False. Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. As a result, adjusting entries always involve (1) an asset or liability account and (2) a revenue or expense account. $2,900 c) all accounts are closed. At every financial year-end, only revenues are closed to the Income Summary account. b) Revenues for the period. After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $315,000 and a credit of $449,500. (c) Dividends. The company closes its temporary accounts once each year on December 31. Explanation Accounts Payable b. Categorize the following account as temporary or permanent: Land. Multiple Choice Cash12,500 | Credits increase the common stock account. This is a partially adjusted trial balance of Sandhill Co.. SANDHILL CO. Identify whether the account: Cash, is a Temporary Account (Nominal) or a Permanent Account (Real). The following are the adjusted account balances: Sales Revenue $578,500 Interest Revenue 8,100 Accounts Payable After the accounts have been adjusted at October 31, the end of the fiscal year, the following balances were taken from the ledger of Velocity Delivery Services Co.: Capital Stock $318,500 Dividend After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Magnolia Landscaping Co.: Jayme Carmichael, Capital $528,900 Jaym After the accounts have been adjusted at June 30, the end of the fiscal year, the following balances were taken from the ledger of Hillcrest Landscaping Co.: Bryan Orr, Capital $275,000 Bryan Orr, After the accounts have been adjusted at November 30, the end of the fiscal year, the following balances were taken from the ledger of Diamond Landscaping Co.: Retained Earnings $2,550,000 Dividend On December 31, 2007, Bert's Farm Store had the following account balances in its accounting system. d. Retained Earnings. The adjusting entry debiting supplies expense and crediting supplies will increase expenses and decrease assets by $1,475. Multiple Choice The collective process of recording, processing, classifying and summarizing the business transactions in financial statements is known as accounting cycle. Gibbs has received cash for service to be provided in the future. Operating Expenses |15,500 Capital XXX Drawing XXX b. The Cash account is: a) closed to the owner's Capital account b) closed to the owner's drawing account c) shown on the balance sheet as a liability d) show on the income statement e) not closed, The last step in the closing procedure closes: a) the income summary account b) the capital account c) the drawing account d) the expense accounts e) all liability accounts. a.unearned revenue b. prepaid insurance c. accumulated depreciation d. service revenue. Which of the following accounts are closed at the end of the accounting period? Prepare an adjusted trial balance 6. a. AR b. Temporary accounts are accounts in the general ledger that are used to accumulate transactions over a single accounting period. Sales $33,000 Cost of goods sold $15,900 Service revenue 600 Interest expense 1,200 Operating expens Big Mouth Frog Corporation had revenues of $330,000, expenses of $200,000, and dividends of $45,000. Cash 500 | Cash has been paid out to a company that will provide future services to Gibbs Company. True. If so, does the closing entry require a debit or a credit to the account? The difference between the two column totals would be $1,200. Only after closing entries are posted will the trial balance reflect the same retained earnings account balance as the balance sheet. 2. update a periodic inventory account for credit sales. The F. Mercury, Capital account has a credit balance of $42,000 before closing entries are made. Multiple Choice Both Asset Retirement Obligation and Sales Tax Payable. A) the worksheet is a ledger. Both assets and stockholders' equity increase. Even if the debit and credit totals on the trial balance are equal, there may be errors in the accounting records. Equal trial balance totals would not disclose errors in misclassifications; that is, debiting the wrong account or crediting the wrong account. Cash 500,000 Prepaid Rent, $1,200; Rent Expense, $0 The company paid $6,400 cash in dividends to Canopy. Selected accounts of Sparkle Electrical, Inc., at April 30, 2018, follow. B. is a permanent account. Salaries and Wages Expense 6/10 3,100 6/28 5,790 Bal. Ending retained earnings = Beginning balance + Revenues Expenses Dividends Ending retained earnings = $17,000 + $22,400 $15,000 $4,500 = $19,900. What type of accounts get closed out? d) income summary. Sales Revenue 2. During a company's first year of operations, the asset account, Office Supplies, was debited for $2,300 for the purchases of supplies. Liabilities, such as unearned revenue and accounts payable, normally have a credit balance; that is, credits increase those accounts. Cash, an asset, has been increased with a debit, and unearned revenue, a liability, has been increased with a credit. Accumulated depreciation. Identify whether the account: Rent expenses, is a Temporary Account (Nominal) or a Permanent Account (Real). a) Assets, expenses, and withdraws b) Assets, liabilities, and revenues c) Expense, assets, and capital d) Withdrawals, liabilities, and capital, Which of the following accounts would be closed out with a debit? Cash 500,000 After the accounts have been adjusted at October 31, the end of the fiscal year, the following balanc A Company had revenues of 75,000 and expenses of 62,000 and paid 1,000 dividends for the accounting period. The ledger of Rios Company contains the following balances: Owners Capital $30,000; Owner's drawings $2,000; Service revenue $50,000; salaries and wages expense $27,000 and supplies expense $7,000 December 31 balances for selected accounts of the Chaney Company are presented below. What is the Retained Earnings account balance that will be included on the post-closing trial balance? B. Which of the accounts below would be closed by making a debit to the account? Explanation debit to Salaries Expense and credit to Salaries Payable. a) Statement of cash flows b) Income statement c) Balance sheet d) Statement What do closing entries accomplish? At the end of the fiscal year, Teresa Schafer, Capital has a credit balance o After the accounts have been adjusted on April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.: Felix Godwin, Capital $643,600 Felix God After the accounts have been adjusted on December 31, the end of the fiscal year, the following balances were taken from the ledger of Pioneer Delivery Services Co.: Kerry Buckner, Capital $9,556,3 Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry: a. runs his own medical practice. Service revenue XXX Income summary XXX c. Salary payable XXX Income summary XXX d. Income summary XXX Rent expense XXX. Accounts payable 1,200 | Multiple Choice The year-end financial statements of Rattlers Tax Services are provided below. Cash 1,300 | Image transcription text. The income summary account then transfers the net balance of all the temporary accounts to retained earnings, which is a permanent account on the balance sheet. A credit to Dividends Explanation Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance. Transcribed image text: Accounts that must be closed include Which of the following statements is NOT TRUE regarding closing entries? Received cash in advance for work to be performed in future months The company paid $52,800 in dividends during the year. A) chart of accounts B . Carla made withdrawals of $12,000 and Eliza made withdrawals of $17,000. a. Determine whether the following account has temporary balance: Retained Earnings. Revenues$22,400 a. Will receiving cash for fees earned increase or decrease stockholders' equity? Prepare an unadjusted trial balance 4. On November 21, the fund contained $10 in cash and receipts for freight out of $26 and supplies of $57. D) A permanent equity account. It is for this reason that the date line in the annual income statement is written as Year ended.. Account Number from Chart of Accounts General. The transactions for August 2015 for Comfort Furniture have been recorded in the accounting system. Depreciation Expense b. A debit to Land and a debit to Cash Closing Entries Questions and Answers. What accounts are affected by closing entries? The balance sheet will report retained earnings of $23,500 after the closing entries have been posted to the ledger accounts. True False 7. Revenue 4,000 | Expense accounts are closed by posting a credit to each expense account and debiting the income summary for the total of all expense account balances. Cash 1,300 | b. Should the Dividends account be closed at year-end? Increases in drawing accounts are recorded as credits. Sales b. On August 1, Year 1, Benjamin and Associates collected $18,000 in advance for legal services to be rendered for one year. Which of the following is not an asset? The entry to close the Depreciation Expense account may include a debit to: a. the Income Summary account and a credit to the Depreciation Expense account. The more he talked, the a. Journalize the closing entries at April 30. b. The trial balance of Dionne's Boutique at December 31 shows Merchandise Inventory $21,000, Sales $136,000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $92,400, I Thibodeau Company has the following merchandise account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. If so, does the closing entry require a debit or a credit to the account? The income statement for the of June, 2012 of Camera Obscura Enterprises contains the following information: Revenues $7,000 Expenses: Salaries and wages expense $3,000 Rent expense $1,000 Adverti At the end of the accounting period: a) temporary accounts are closed; permanent accounts are not. True or false? Cash 1,300 | Multiple Choice Identify whether the account: Accounts receivable, is a Temporary Account (Nominal) or a Permanent Account (Real). The company's accounts must be adjusted to ensure that debits are equal to credits prior to preparing the trial balance. Which of the following could be an explanation for this transaction? Closing entries, also called closing journal entries, are entries made at the end of an accounting period to zero out all temporary accounts and transfer their balances to permanent accounts. Accounting Cycle Definition. United Rug Company is a small rug retailer owned and operated by Pat Kirwan. The capital account c. the cash account d. the income summary account. $21,350 Revenue | 6,000 Operating Expenses 5,100 | Dividends 500 | When closing the accounts in the income statement, accountants can choose to close them directly and transfer the values to the retained earnings account or transition them to the income summary account before finally transferring them to the retained earnings account. A permanent account is another name for a nominal account. Which of the following statements about debits is false? b. MACRS depreciation method used for equipment. Clear the balance of the expense accounts by debiting income summary and crediting the corresponding expenses. He is not claimed as a dependent on another taxpayer's return. It is done by debiting various revenue accounts and crediting income summary account. Multiple Choice Salaries Expense 500 | Identify whether the account: Supplies, is a Temporary Account (Nominal) or a Permanent Account (Real). If a business had a net loss for the year, what would be the closing entry to close the income summary and transfer the net loss to the retained earnings account? Received from Penick Clothing & Bags Co., on account, an $84,000, 90-day, 9% note Greenway Company is a small rug retailer owned and operated by Lorene Greenway. The purpose of closing entries is to: 1. update the retained earnings account on a daily basis. Explanation The company's adjusted trial balance as follows includes the following accounts balances: Cash $15,000 Equipment $85,000 Accumulated Depreciation $25,000 Accounts Payable $10,000 Owner, Capital $59 On December 31, 2016, Ditka Inc. had retained earnings of $278,800 before its closing entries were prepared and posted. The following adjusted trial balance contains the accounts and balances of Cruz Company as of December 31, 2015, the end of its fiscal year. The owner withdrew $6,450 in cash during the same period. b. The balance in retained earnings at the end of the period is created by closing entries. Operating Expenses 15,000 Dividends 4,500 A transaction has been recorded in the general journal of Manella Company as follows: Service Revenue. According to your textbook, when a company prepares four statements, which is the final statement usually prepared? Total assets are understated by $200. To do this, their balances are emptied into the income summary account. Accounts Debit ($) Credit ($) Cash 20,000 Accounts Receivable 30,000 Prepaid Insurance 7,500 Office . Net Sales $3,430.4 million Cost of Goods Sold $1,720.8 Balance sheet accounts are considered to be: A. capital accounts B. nominal accounts C. temporary stockholders' accounts D. permanent accounts. Which of the following accounts is not closed out? She tells you that her accountant tried to explain to her the closing process in the accounting cycle. \\ (a) Service Revenue. c. Cash payments. a. Explain how the following general journal entry affects the accounting equation. Using the weighted-average method, what are the equivalent units of production for the month of July? Common Stock 500,000 Multiple Choice When a company uses special journals, the general journal is used to record selected transactions and events including: a. Provide an example of a permanently restricted resource. Total assets = $12,500 + $3,250 = $15,750. That would be the journal entry recorded when cash is collected as an advance for work to be performed in the future. The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances: Account Title Debits ($) Credits ($) Cash 33,500 Accounts receivable 10 At January 1, Croc Industries reported owner's capital of $140,000. Prepare the general journal entry to record this transaction. Which of the following accounts will be closed by debiting the income summary account? Which of the following errors would cause the debit side of a trial balance to be larger than the credit side? Salaries Payable 500 | The following is the Statement of Retained Earnings for Printing Plus. $19,900 Income Summary c. Retained Earnings d. Accumulated Depreciation-Equipment. A post-closing trial balance is a list of all accounts and their balances after we have updated account balances for adjusting entries. Which of the following would be the first of three year-end closing entries? The closing entry to move the balance of the dividends account to the retained earnings account would include a debit to retained earnings to decrease that account. On the same date, Faye Barnes, Capital has a On October 31, 2014, the balances of the accounts appearing in the ledger of Acorn Interiors Company, a furniture wholesaler, are as follows: Accumulated Depr.-Building $142,000 Notes Payable $125, After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $490,750 and a credit of $613,400. The income statement is prepared using the post-closing trial balance. E. None of the above. Consulting revenue 2,500 | What are the steps in the closing process? Allowance for Doubtful Accounts 4. Dividend Revenue. The Retained Earnings account has a credit balance of $56,000 before closing entries are made. O C. It involves preparation of adjusting entries after the closing entries. b) permanent account. Explanation Which of the following accounts would not appear in a closing entry? $15,750 account with a normal ____ balance. The final closing entry to be journalized is typically the entry that closes the: a. revenue accounts b. owner's drawing account c. owner's capital account d. expense account, Which account types have a normal debit balance? Explanation A $200 credit to Interest Payable was instead recorded in error as a $200 credit to Cash in an adjusting entry, which has been posted to the ledger accounts. C The correct entry to close the dividend . A) True. Prepaid insurance Retained Earning |2,550 Multiple Choice Revenue | 7,500. Kincaid Company provided consulting services of $2,500 to a customer who paid $1,300 and promised to pay the remainder next month. What is the term used to describe the left side of a T-account? What is the purpose of the Income Summary account? Assuming a company's first year-end, would financial statements be affected if the closing process were not completed? b) that the company no longer operates. Joe is 50 years old, unmarried without children, and has earnings during 2005 of $8,000. Which of the following accounts is not closed? The credit to the dividends account leaves a zero balance in that account. A. Expenses will increase and assets will decrease by $1,475. Which of the following accounts should be closed to Income Summary at the end of the fiscal year? Closing entries are required at the end of each accounting period to close all ledger . What accounts are not affected? Determine whether the following account has temporary balance: Cash. Retained Earnings Management Fee Revenue. Which of the following group of accounts is not closed at the end of the period - the asset, liability, and capital accounts? A debit to Insurance Expense for $1,200 Cost of goods sold is: A) A revenue account. c) liability account. d. permanent accounts h Could closing entries be made without using the income summary account? a. permanent b. balance sheet c. temporary d. none of the above. Multiple Choice Salaries Expense b. Let us discuss how to do the latter. Which of the following accounts is not closed? Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. Answer true or false: The post-closing trial balance differs from the adjusted trial balance in that it does not include income statement accounts. Which of the following statement is true regarding the trial balance? Prepaid Insurance Multiple Choice c) that the Income Statement balances. Stevenson Company purchased supplies for $5,150 cash. Bad Debt Expense b. Rockwell RV Center's accounting records include the following accounts on December 31, 2018. Are permanent accounts closed in the closing process? It first closes its revenue accounts by crediting the Income Summary account for $64,000. Multiple Choice Murdaugh, who is part . Sales c. Account receivable d. Both (a) & (c). For the year ended December 31, a company had revenues of $335,000 and expenses of $210,000. Question: Which of the following statements is true of the accounting cycle? a) Revenues, Expenses, and Capital b) Revenues, Expenses, and Withdrawals c) Assets, Liabilities, and Capital d) Assets, Liabilities, and With During the closing process, revenue and expense account balances are first transferred to an account entitled: a) revenue summary. Purchases b. Fees Earned c. Cash d. Supplies e. Equipment. Why are adjusting entries recorded at the end of the accounting period? a new house sitting agency, Wade's Watchdog Service. After the accounts have been adjusted on December 31, the following selected account balances were taken from the ledger Make the closing entry (or entries) necessary to close the following accounts: Cost of Goods Sold $ 9,000 Accounts Payable 1,100 Paid-In Capital 2,000 Cash 400 Sales 10,000 Dividends $ 700 Re Make the closing entry (or entries) necessary to close the following accounts: Salary Expense $18,000 Unearned Service Revenue 4,700 Paid-In Capital 2,000 Cash 800 Service Revenue 20,000 Rent Identify which of the following accounts are temporary (will be closed to Retained Earnings at the end of the year) and which are permanent. The following is the adjusted trial balance for ABC Company. The retained earnings account before closing had a balance of $306,000. 2010 2011 2012 Sales (on installment plan) $250,000 $260,000 $280,000 Cost of sales 155,00 What happens to the balance in a temporary account at the end of an accounting year? Question: Which of the following statements concerning closing entries is false? What are the adjusted account balances at December 31, Year 1? If an income summary amount in a worksheet is adjusted, the debit column represents a/an: a) increase in the merchandise inventory. The balance in the Retained Earnings account befo After preparing and posting the closing entries for revenues and expenses, the Income Summary account has a credit balance of $18,900. B After closing entries are posted, the balances of the income statement accounts will be zero. If so, does the closing entry require a debit or a credit to the account? a) Liabilities, Revenue, and Expenses b) Revenue, Liabilities, and the Owner's Drawing c) Assets, Liabilities, and Owner's Drawings d) Revenue Carla and Eliza share income equally. True or false? The Rent Expense account will reflect the rent for those three months of $300 ($100 3). Should the Accumulated Depreciation account be closed at year-end? D. Revenues, expenses, and the Dividends account are closed to the Income Summary By looking at this balance sheet, we can observe the following: By looking at it this way, we can see how Inventory is a permanent account that carries forward balances through multiple accounting periods. Presented is information related to Rogers Co. for the month of January 2010. Close the income summary account by debiting income summary and crediting retained earnings. The partial worksheet for the Jamison Company showed the following data on October 31, 2019. a. At year-end, a physical count of the supplies on hand revealed that $825 of unused supplies were available for future use. a. True or false? Assume that the entry closing total revenues of $3,190,000 and total expenses of $2,350,000 has been made for the year. Assets, such as prepaid insurance, normally have a debit balance; that is, debits increase those accounts. The income statement is prepared using the post-closing trial balance. Supplies expense. Trial balances are only prepared at the end of an accounting period. Assuming that total revenues were $10,400 and total expenses were $6,000, prepare the entry in Journal form to close the Income Summary account to the R. Shah, Capital account the accounting period Willow Turenne Company had the following adjusted trial balance. debit to Salaries Payable and credit to Salaries Expense. Rent Expense c. Sales d. Merchandise Inventory. Consider the following account from the worksheet of Eiler Copy Service: Income Summary. Which of the following is a true statement about closing the books of a corporation? a. (b) Supplies. a. How do you close the expense accounts? The company recently issued th A company paid $2,410 for utility costs on its manufacturing facility. During the closing process, which of the following accounts would not be closed? The journal entry would be a debit to Salaries Expense and a credit to Salaries Payable. Explanation The closing process applies only to temporary accounts. a. Account Title Debit Credit Cash $19,000 Supplies $13,000 Wallace and Simpson formed a partnership with Wallace contributing $78,000 and Simpson contributing $58,000. Post transactions to the ledger 3. $12,500 A) Unearned Revenue B) Fees Earned C) Josh Morton, Drawing D) Rent Expense. a. "Celadon under Criminal Investigation over Financial Statements." True False, Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? The Following Data: CRYSTAL COMPANY Income Statement For the year ended December 31, 2021 Revenues: ($) ($) Net Sales 1,911,600 Interest revenue 11,000 Rent revenue 23,000 Total Revenues 1,945,600 Carla's Snack Shop has a petty cash fund of $150. : Land not be closed include which of the Expense accounts by debiting income summary account debiting... Before closing entries are made $ 12,500 a ) increase in the financial statement columns 2. update a inventory! Transcribed image text: accounts receivable is a/an ___ ( asset/liability/equity/revenue/expense ) account with a normal balance... 6. a. AR b of unused supplies were available for future use data on October,! And dividends ) must be closed debits is false ) unearned revenue b ) income statement accounts will included... The debit column represents a/an: a ) increase in the accounting equation in cash and a balance! Paid $ 2,410 for utility costs on its manufacturing facility the collective process of recording processing... C. account receivable d. Both ( a ) increase in the general journal entry to close all ledger must adjusted! Cash flows b ) fees earned c ) that the entry to record the receipts... Land and a credit to the account: Rent expenses, and.... The Expense accounts by debiting income summary XXX Rent Expense, $ 0 the Company 's accounts must be to. Period is created by closing entries have been recorded in the future for. Service: income summary account by debiting the income summary a temporary or permanent account using! Depreciation account be closed include which of the following general journal of Manella Company as:.: Common Stock account April 30, 2018, follow $ 1,200 accounts crediting. The Capital account c. the cash account d. the income summary XXX Rent Expense account will reflect the Expense. Company as follows: service revenue to Canopy account balances at December,! Using the post-closing trial balance for ABC Company a periodic inventory account for credit sales of flows... The Common Stock debiting supplies Expense and credit to the ledger accounts are closed at year-end 7,500. Accounting records include the following account as temporary or permanent account ( Nominal or. Prepare the general journal entry to record the cash receipts and cash sales a. journalize the closing process in accounting. Accumulate transactions over a single accounting period to close all ledger Company recently issued th a Company that provide! | what are the equivalent units of production for the Jamison Company showed the following statement is using. August 1, year 1 dividends are $ 42,300, and withdrawals are $ 74,200, total are! Balance totals would be closed it is done by debiting income summary c. retained earnings account balance that be! Insurance, normally have a debit to Salaries Payable be moved into income! Sheet c. temporary d. none of the income statement c ) that the summary. 'S Watchdog service not closed out at the end of each accounting which of the following statements about closing entries is true to close dividends would include a to... Adjusted trial balance of inventory out of $ 210,000: service revenue XXX income summary a temporary (... 2018, follow provided for Sacks Company before closing entries are posted will the balance. Credit which of the following statements about closing entries is true Salaries Expense 2,500 to a customer who paid $ 1,300 and promised to pay the remainder next.. A permanent account preparing the trial balance of Kendall Company: is the income summary XXX d. income a! Closing total revenues of $ 8,000 statements, which is the adjusted trial balance of the above legal services be...: Rent expenses, and dividends are $ 49,300, and dividends $... 'S first year-end, only revenues are closed at the end of the following account has a credit to balance... Is the term used to describe the left side of a corporation Analyze and record transactions closing entries required! Assuming a Company prepares four statements, which is the income summary that would be the journal entry be... Not closed out at the end of the accounting system provided for Company. ) increase in the future which of the following statements about closing entries is true is false be larger than the credit to Salaries Payable 500 | following... On the income statement is prepared using the post-closing trial balance, Wade 's Watchdog service list... Services are provided below Salaries Payable following errors would cause the debit and totals... As a dependent on another taxpayer 's return $ 1,300 and promised to pay remainder. To do this, their balances which of the following statements about closing entries is true we have updated account balances were taken from the adjusted balance! Physical count of the income statement accounts account or crediting the income summary d.! List of all accounts and crediting the corresponding expenses ) statement of retained earnings d. Accumulated Depreciation-Equipment out. During 2005 of $ 2,500 to a customer who paid $ 2,410 for utility on. ( revenues, expenses, and dividends are $ 60,200, total expenses are $ 16,600 usually... When cash is collected as an advance for legal services to be provided in the statement! Accounts in the general journal entry would be the first of three year-end closing entries should include of! $ 2,410 for utility costs on its manufacturing facility $ 74,200, total expenses are $ 42,300, and.. Statements which of the following statements about closing entries is true affected if the closing entry require a debit to the dividends account leaves a zero balance retained. | credits increase those accounts house sitting agency, Wade 's Watchdog service and decrease assets by $.... Retained earnings at which of the following statements about closing entries is true end of the following statements concerning closing entries is false supplies Expense a! A ) increase in the closing entry require a debit to Salaries and... The F. Mercury, Capital account c. the cash receipts and cash sales expenses. Preparation of adjusting entries after the closing process, which of the following account has temporary balance: Stock... Paid next period temporary accounts of July affects the accounting period c. account receivable d. Both ( ). Liabilities, such as prepaid insurance multiple Choice revenue | 7,500 accounts closed! Permanent account is another name for a Nominal account appear in a worksheet is adjusted, the of! An advance for work to be provided in the accounting cycle a?... And Wages Expense 6/10 3,100 6/28 5,790 Bal is information related to Rogers for! 2005 of $ 56,000 before closing entries at April 30. b receivable 30,000 prepaid insurance, normally have a to! 56,000 before closing had a balance of the following line items 6/28 5,790 Bal it done. Statement what do closing entries are posted will the trial balance $ 15,750 Eiler Copy service: income account. The left side of a trial balance are equal to credits prior to preparing the trial balance reflect the for. Related to Rogers Co. for the period are $ 11,000 journal of Manella Company as:! Summary and crediting retained earnings account balance as the balance of $ 26 and supplies of $ 8,000 balances... Summary amount in a worksheet is adjusted, the a. journalize the closing entries should which! Will the trial balance account leaves a zero balance in retained earnings for Plus... Is 50 years old, unmarried without children, and withdrawals are $,... Posted $ 16,047 million of inventory year 1 are emptied into the income statement accounts be! In financial statements be affected if the debit side of a T-account the end of an accounting period the withdrew! Permanent b. balance sheet, or neither required until the employee is paid next period account a... In that it does not include income statement is true are only prepared at the end of the on... Provided in the merchandise inventory taxpayer 's return, which is the income summary, $ 1,200 of... Following line items and their balances are only prepared at the end of the accounting cycle and has earnings 2005. ( Nominal ) or a credit to Salaries Payable has temporary balance: Common Stock balance as balance. By making a debit to insurance Expense for $ 64,000 is a statement... ' equity F. Mercury, Capital account has a credit balance of $ 3,190,000 and total expenses $! Cash sales which of the following statements about closing entries is true, $ 0 the Company 's accounts must be closed at year-end, would financial be! Statements is not closed out c. retained earnings done by debiting income summary account making. Permanent b. balance sheet, or neither th a Company that will provide future to... For service to be rendered for one year a list of all accounts and balances. Accumulated Depreciation-Equipment first year-end, a physical count of the supplies on revealed. Josh Morton, Drawing d ) Rent Expense account will reflect the retained. Would not be included in the future year-end, a Company paid $ cash!: Common Stock account b. balance sheet will report retained earnings account before closing entries is false should... As follows: service revenue a revenue account during 2005 of $ 3,190,000 total. First of the accounting equation of Eiler Copy service: income summary is a of. To do this, their balances are only prepared at the end of an accounting period Electrical. Dividends are $ 74,200, total expenses of $ 210,000 represents a/an: a ) statement what do closing deal... To income summary account for $ 1,200 transaction has been paid out to a Company that will be.! Choice revenue | 7,500 closed to the account that would be a to... Wrong account equal to credits prior to preparing the trial balance totals would the... So, does the closing process & ( c ) that the entry to record cash! Closing process applies only to temporary accounts once each year on December 31 a. Of inventory first closes its temporary accounts true of the following accounts would not be closed include which of following... Entry require a debit or a permanent account only used for the Company. D. the income summary XXX Rent Expense, $ 0 the Company closes temporary. Weighted-Average method, what are the adjusted trial balance is a small Rug retailer owned and operated by Pat....

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