which of the following statements about closing entries is true

Rent Expense c. Sales d. Merchandise Inventory. a. 3) Dividends. Using the weighted-average method, what are the equivalent units of production for the month of July? Where is the offsetting entry made when the revenue account is zeroed out? If so, does the closing entry require a debit or a credit to the account? The capital account c. the cash account d. the income summary account. Prepare adjusting entries at the end of the period 5. Identify whether the account: Insurance expense, is a Temporary Account (Nominal) or a Permanent Account (Real). Advance collection of revenues. What is the journal entry required to close out the $1,800 credit balance Classify each of the following investments in assets as either permanent or temporary. Both Asset Retirement Obligation and Sales Tax Payable. A) chart of accounts B . $1,500 5 = $7,500. Answer true or false: Assets, liabilities, and equity accounts are not closed; these accounts are called Temporary Accounts. Identify whether the account: Fees earned, is a Temporary Account (Nominal) or a Permanent Account (Real). The balance sheet will report retained earnings of $23,500 after the closing entries have been posted to the ledger accounts. Some of the fact about the Income Summary account is: A) If we had a Net Loss, we will close the Income Summary by debiting Income Summary and crediting Retained Earnings. Utilities Expense B. Multiple Choice a. 2) Fees Earned. Multiple Choice 1. Retained Earnings | 4,500 The company paid $52,800 in dividends during the year. On December 31, 2007, Bert's Farm Store had the following account balances in its accounting system. The required adjusting entry increases liabilities by crediting salaries payable and increases expenses by debiting salaries expense. Side Kicks has year-end account balances of Sales Revenue $834,710; Interest Revenue $18,600; Cost of Goods Sold $583,930; Administrative Expenses $186,150; Income Tax Expense $32,990; and Dividend At the end of its first year of operation, Dade Corporation has $1,000,000 of common stock and a net income of $216,000. Closing the Withdrawals Account Assuming that withdrawals during the accounting period were $1,600, prepare the entry in journal form to close the R. Shah, Withdrawals account to the R. Shah, Capit Purrfect Pets has made all the year-end adjustments. Fees Earned c. Unearned Rent d. Depreciation Expense. On the right side of the Supplies T-account b) permanent account. What type of accounts get closed out? What accounts are not affected? Close the dividends account by debiting retained earnings and crediting dividends. Multiple Choice The income summary account is also known as the clearing account. The adjusting entry that Able should make to accrue these unpaid salaries on December 31, Year 1 is: Cycle, we continue our discussion of the accounting cycle, completing the last steps of journalizing and posting closing entries and preparing a post-closing trial balance. Unearned revenue 7,500 | Which of the following accounts will be closed by debiting the income summary account? 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. A credit to Insurance Expense for $1,200. What should be the closing entry? Unearned revenue 7,500 | Which of the following journal entries correctly records this transaction? The entry to close Cost of Goods Sold includes a debit to Income Summary. Step 1 - closing the revenue accounts: Transfer the balances of all revenue accounts to income summary account. $15,750 Assets, liabilities, and stockholders' equity. Received cash in advance for work to be performed in future months What is the term that is used to describe the difference between the total debit and credit amounts in a T-account? True or false? Is wage expense classified as an asset, a liability, or owner's equity? Assets, liabilities, and the owner's capital . Equal trial balance totals would not disclose errors in misclassifications; that is, debiting the wrong account or crediting the wrong account. All year-end adjustments had been entered, but the books had not yet been closed. c. Depreciation Expense. The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account M. Smuts showed a net income of $6,000. Accumulated depreciation c. Service revenue d. Depreciation expense. 1) Unearned Revenue. Both assets and stockholders' equity increase. Unearned revenue | 10,500 Should the Interest Expense account be closed at year-end? Cash has been paid out to a company that will provide future services to Gibbs Company. 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. Prepare an adjusted trial balance 6. The debit column of the trial balance would be $600 more than the credit column. A credit to Common Stock Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared. 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. After the accounts have been adjusted on March 31, the following account balances were taken from the ledger: Prepare the closing entries for the Sales Revenue account, assuming a balance of $200,000, and the Cost of Goods Sold account with a $145,000 balance. Bert's Farm S Assets and liabilities accounts are considered permanent accounts. Check out the links below: A free, comprehensive best practices guide to advance your financial modeling skills, Get Certified for Financial Modeling (FMVA). Prepare, (a) The closing entry for net income. A fellow student makes the following statement: "You can easily tell whether a company is using the cash or accrual basis of accounting. C) An expense account. Clear the balance of the expense accounts by debiting income summary and crediting the corresponding expenses. Accumulated depreciation. Journalize the entry to record the cash receipts and cash sales. Consulting revenue | 2,500 The first of the year-end closing entries should include which of the following line items? The balance sheet will report retained earnings of $32,000 after the closing entries have been posted to the ledger accounts. Select the best answer the multiple-choice question below. Expenses are closed to the Expense Summary account. The income statement is prepared using the adjusted trial balance. Describe the difference between temporary and permanent accounts, and state which ones are closed. A credit to Land and a credit to Cash a. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? Even if the totals are equal, however, there may be errors in the accounting records. b. Browse through all study tools. What is the Retained Earnings account balance that will be included on the post-closing trial balance? True False. Additional paid-in capital c. Sales revenue d. Cost of goods sold. Liabilities increase and stockholders' equity decreases. Which of the following is a permanent account? Assets C. Liabilities D. Owner's Equity. Operating Expenses 15,000 Dividends 4,500 Unearned Revenue | 4,000 Recorded adjusting entry for work completed Identify whether the account: Cash, is a Temporary Account (Nominal) or a Permanent Account (Real). A) Revenue accounts are debited and the income summary account is credited. If the debit total does not equal the credit total on the trial balance, the accountant knows to search for an error. Explanation a. The adjusting entry decreases unearned revenue, a liability, and increases revenue. Bad Debt Expense b. Multiple Choice Revenue 4,000 | The related adjusting entry has no effect on net income or the accounting equation. d. Interest revenue. Which of the following accounts is not closed? Explanation Cash 1,300 | The balances of these accounts areeventually used to construct the income statement at the end of the fiscal year. At December 31, Ortiz Corporation reports a net income of $405,900. Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared. Prepare the entry to close net income. Income Summary has a debit of $175,400 and a credit of $235,000. Following are selected accounts and their balances for a company after the adjustments as of May 31, the end of its fiscal year. Following; main inventory accounting systems; 1 page. Debits increase asset accounts; credits decrease asset accounts. This process is also called as the . "Celadon under Criminal Investigation over Financial Statements." These series of steps begin when a business transaction takes place and ends when the financial statements are prepared. Debits decrease liability and stockholders' equity accounts; credits increase liability and stockholders' equity accounts. A) $5,000. No dividends were paid. Explain. Closing entries are recorded after financial statements have been prepared. Service Revenue 18,800 | Determine whether the following account has a temporary balance: Service Revenue. D. Service fees earned. Borrowers total debits (charges) subtracted from the sellers total credits B. Accounti After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $189,000 and a credit of $253,300. Approach to solving the question: I have used the similar format as provided in the question for better understanding. Which of the following statements is true regarding a trial balance that balances? Which of the following statements is true? To understand this better, we can look at an account such as inventory. The amounts reported on the financial statements will not be affected by the closing entries. Fees Earned C. Prepaid Insurance D. Insurance Expense. Explanation d. accumulated depreciation. American Chip Corporation's fiscal year-end is December 31. Sales c. Account receivable d. Both (a) & (c). Salaries Expense 500 | A debit to Land and a credit to Cash. Cash 1,300 | 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? Multiple Choice Create an account to browse all assetstoday. From the following list, identify the accounts that should be closed to Income Summary at the end of the fiscal year: a. The worksheet for Adams Company shows the following in the financial statement columns. depreciation expense, service revenue, and dividends Expenses are closed by debiting retained earnings and crediting each expense account All permanent accounts must be closed to retained earnings at the end of the 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. Describe the closing entries normally made by a merchandising company. Zero out the revenues, expenses, and dividends. It is recorded as a debit in the Cash T-account and a credit to the Common Stock account. Accruing salary expenses will increase Salaries Expense and increase Salaries Payable, a liability. Question: Which of the following statements concerning closing entries is false? Salaries Expense 500 | Which of the following accounts is not closed in the Income Summary account at the end of the accounting period? 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. The income summary account is also known as the clearing account. None of these answer choices would cause the debit side of the trial balance to be larger than the credit side. Explanation Are temporary accounts closed in the closing process? It is a ____ (temporary/permanent) account. Explain. Received cash for services completed. Prepare journal entries to close the temporary accounts and then post these entries to the T-accounts. Adjusting entries are recorded before (rather than after) the closing entries are recorded. Which of the following statements about debits is false? What Indicate whether the following account is considered an asset, a liability, a stockholders' equity, a revenue or an expense: Cost of goods sold. What is the purpose of the Income Summary account? Retained earnings will decrease by $2,550. -A. Alt temporary accounts must be closed at the end of the accounting period. This misclassification (crediting the wrong account) will not cause the debit and credit totals on the trial balance to be out of balance. Total revenues for the period are $55,200, total expenses are $39,800, and dividends are $9,000. A Closing entries are recorded at the end of each reporting period which could be monthly, quarterly or annually. Explanation She tells you that her accountant tried to explain to her the closing process in the accounting cycle.

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