Step-by-step explanation. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? debit to Salaries Payable and credit to Salaries Expense. Increases in drawing accounts are recorded as credits. Accumulated depreciation c. Service revenue d. Depreciation expense. An error has occurred in the closing entry process if the balance sheet accounts have zero balances. Explanation Both liabilities and assets increase. 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 a. When preparing closing entries under the periodic inventory system, . Rent Expense b. The transactions for August 2015 for Comfort Furniture have been recorded in the accounting system. Sales b. Closing entries. b. Provide an example of a permanently restricted resource. Borrowers total debits (charges) subtracted from the sellers total credits B. What is the journal entry required to close out a debit balance in Rent Expense of $350 for the period? Select one: A. Why sales account would be debited at the end of the accounting period? The equality of debits and credits has been proven. 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. For this reason, these types of accounts are called temporary or nominal accounts. Explain how the following general journal entry affects the accounting equation. c) capital summary. Multiple Choice Which of the following accounts is not closed? The adjusting entry debiting supplies expense and crediting supplies will increase expenses and decrease assets by $1,475. If so, does the closing entry require a debit or a credit to the account? The journal entry would be a debit to unearned revenue and a credit to revenue. b. inventory. A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries is called _____. Retained Earnings | 4,500 The income statement will report net income of $23,500 after the closing entries have been posted to the ledger accounts. Fees Earned C. Prepaid Insurance D. Insurance Expense. Multiple Choice 1) Unearned Revenue. 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. After completing the closing entries for revenues and expenses, the Income Summary account has a credit balance of $1,800. Which of the following accounts are closed at the end of the accounting period? True or false? Which of the following causes a permanent difference between taxable income and pretax accounting income? Depreciation Expense b. Service revenue | 500 The income statement is a financial statement that is used to portray a companys financial performance and activities over a single fiscal year. O D. It is a process by which financial statements for a period are produced. The closing process applies only to temporary accounts. Account Title:Deb | Cred Which of the following is an appropriate closing entry? Revenue | 7,500. Which of the following accounts would be closed at the end of the accounting period with a debit? Total assets = $12,500 + $3,250 = $15,750. United Rug Company is a small rug retailer owned and operated by Pat Kirwan. Explanation Multiple Choice a. Unearned Revenue | 1,500 The income summary account is also known as the clearing account. E. None of the above. Explanation Explanation Which of the following is a true statement about closing the books of a corporation? Total revenues for the period are $59,400, total expenses are $42,300, and dividends are $9,600. Advertising expense c. Insurance expense d. Interest revenue e. None of the above. Salaries Expense b. Equal totals in a trial balance guarantees that no errors were made in the recording process. What particular item of financial or operating data appears on both the income statement and the statement of owner s equity? The debit column of the trial balance would be $1,200 more than the credit column. The credit column of the trial balance would be $1,200 more than the debit column. Explanation Explanation True or false? A credit to Dividends 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. Sales Discount b. A credit to Dividends Trial balances are only prepared at the end of an accounting period. Income Summary has a credit balance of $20,000. Which one of the following would not be included in a closing entry? Companies use closing entries to reset the balances of temporary accounts accounts that show balances over a single accounting period to zero. A Closing entries are recorded at the end of each reporting period which could be monthly, quarterly or annually. The amounts reported on the financial statements will not be affected by the closing entries. Its expense accounts total $130,000, and its revenue accounts total $190,000. Accounts Payable | 2,800 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. 4) Rent Expense. The Cash account must be adjusted for the effects of the daily transactions with customers and creditors. Go ahead and submit it to our experts to be answered. Expenses will increase and assets will decrease by $1,475. Revenues$22,400 Fees Earned c. Cash d. Supplies e. Equipment. The two asset accounts listed on the trial balance are Cash and Accounts Receivable. Land purchased with cash was recorded with a debit to the Land account and a credit to Accounts Payable. Income Summary is a permanent account only used for the closing process. Even if the totals are equal, however, there may be errors in the accounting records. How would the related adjusting entry be recorded in the company's T-accounts? d) expenses account. Kincaid Company provided consulting services of $2,500 to a customer who paid $1,300 and promised to pay the remainder next month. Prepare adjusting entries at the end of the period 5. Multiple Choice Accumulated depreciation. Multiple Choice True False. D. Revenues, expenses, and the Dividends account are closed to the Income Summary Total assets are understated by $200. c. Prepare a post-closing trial balance at April 30. Closing entries never involve posting a credit to the: (a) Income summary account. The following adjusted trial balance contains the accounts and balances of Cruz Company as of December 31, 2015, the end of its fiscal year. Adjusting entries are recorded after the closing entries have been recorded. $21,350 False. Identify whether the account: Fees earned, is a Temporary Account (Nominal) or a Permanent Account (Real). 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. 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. The data from the temporary accounts (revenues, expenses, and dividends) must be moved into the retained earnings account. b. Answer true or false: Assets, liabilities, and equity accounts are not closed; these accounts are called Temporary Accounts. Assuming a company's first year-end, would financial statements be affected if the closing process were not completed? Debits decrease liability and stockholders' equity accounts; credits increase liability and stockholders' equity accounts. True or false? Which of the following accounts is decreased with a debit? Total revenues for the period are $74,200, total expenses are $49,300, and dividends are $16,600. Only revenues are closed to the Income Summary account. Withdrawals b. Clear the balance of the revenue account by debiting revenue and crediting income summary. Which of the following entries closes the owner's drawing account at the end of the period? Service Revenue. During the year, Croc had a net loss of $30,000 and owner drawings of $15,000. Carla made withdrawals of $12,000 and Eliza made withdrawals of $17,000. 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. B. Revenue accounts temporarily substitute for the credit side of the owner's capital account. Utilities expense is an example of a temporary capital account. B After closing entries are posted, the balances of the income statement accounts will be zero. The debit column of the trial balance would be $1,200 more than the credit column. Comfort Furniture is organized as a corporation. runs his own medical practice. The company paid $6,400 cash in dividends to Canopy. Explain theoretically how the distinction between temporary and permanent accounts relates to the closing process. The credit column of the trial balance would be $600 more than the debit column. a. AR b. Use T accounts. Retained Earning |2,550 debit to Salaries Expense and credit to Cash. How are time tickets used in job order costing? Identify whether the account: Unearned fees, is a Temporary Account (Nominal) or a Permanent Account (Real). A. Assets C. Liabilities D. Owner's Equity. Total liabilities are overstated by $200. Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period, are: a. real accounts b. temporary accounts c. closing accounts d. permanent accounts e. balance Carla Ltd. purchased a building on January 1, 2015 for $14,860,000. Why are adjusting entries recorded at the end of the accounting period? 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. Which of the following accounts is increased with a debit? How do you close the expense accounts? Gibbs has completed services for which they had earlier received cash in advance. Identify whether the account: Rent expenses, is a Temporary Account (Nominal) or a Permanent Account (Real). Explanation 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. Permanent accounts would not include: a. cost of goods sold. It is recorded as a debit to unearned revenue and a credit to the revenue account. Closing entries are required at the end of each accounting period to close all ledger accounts. b) permanent account. C. Accounts receivable. What are the adjusted account balances at December 31, Year 1? Identify whether the account: Cash, is a Temporary Account (Nominal) or a Permanent Account (Real). 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. Which of the following accounts is not found in closing entries? 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? Trial balances are only prepared at the end of an accounting period. All year-end adjustments had been entered, but the books had not yet been closed. A transaction has been recorded in the general journal of Manella Company as follows: Cash12,500 | Multiple Choice Identify each of the following categories of accounts as temporary or permanent: 1. assets 2. liabilities 3. equity 4. revenues 5. expenses 6. dividends. When the income statement is published at the end of the year, the balances of these accounts are transferred to the income summary, which is also a temporary account. Received cash in advance for work to be performed in future months The ledger of Swann Company contains the following balances: Retained Earnings $30,000; Dividends $2,000; Service Revenue $50,000; Salaries Expense $27,000; and Supplies Expense $4,000. Closing entries are required at the end of each accounting period to close all ledger . Accounts Payable Prepare the general journal entry to record this transaction. Prepaid Rent, $900; Rent Expense, $300 A. Closing entries bring the Retained Earnings account to its correct ending balance. Accumulated Depreciation. Cash 4,000 | The following account balances were taken from the adjusted trial balance of Kendall Company: Which of the following is the result of this error? a. net income b. income summary c. dividends d. assets. This is a partial adjusted trial balance of Barone Company. Can't find the question you're looking for? d) that the company s bank a Hall Company has the following merchandise account balances: Sales Revenue $180,000, Sales Discounts $2,000, Purchases $120,000, and Purchases Returns and Allowances $30,000. Companies use closing entries to reset the balances of temporary accounts accounts that show balances over a single accounting period to zero. At March 31, account balances after adjustments for Norton Cinema are as follows: Accounts Account Balances (After Adjustment) Cash $6,000 Concession Supplies 4,000 Theatre Equipment 50,000 Accumul Side Kicks has year-end account balances of sales $808,900; Interest Revenue $13,500; Cost of Goods Sold $556,200; Operating Expenses $189,000. Prepare the general journal entry to record th All general ledger accounts are adjusted and closed at the end of the accounting cycle. Which of the following statements regarding closing entries is true? c. Dividends. Explanation Salaries Expense | 500. Land, an asset, is increased with a debit, and cash, another asset, is decreased with a credit. The following is a partial adjusted trial balance as of December 31, 2013. The income statement for the Four Oaks Golf Club Inc. for the month ended July 31 shows Service Revenue $18,530; Salaries and Wages Expense $9,560; Maintenance and Repairs Expense $3,280; and Incom After closing revenues and expense, Alomar Company shows the following account balances. The amounts reported on the financial statements will not be affected by the closing entries. Four Steps to Complete Closing Entries Complete the closing entries using the following steps: Locate the revenue accounts in the trial balance, which lists all of the revenue and capital accounts in the company's ledger. This step closes all revenue accounts. B. Debits increase asset accounts; credits decrease asset accounts. Which of the following entries could not be a closing Wallace and Simpson formed a partnership with Wallace contributing $92,000 and Simpson contributing $72,000. Service revenue XXX Income summary XXX c. Salary payable XXX Income summary XXX d. Income summary XXX Rent expense XXX. The company's accounts must be adjusted to ensure that debits are equal to credits prior to preparing the trial balance. (d) Accumulated Depreciation. True False. Unearned Revenue 4,000 | Accruing salary expenses will increase Salaries Expense and increase Salaries Payable, a liability. In preparing closing entries, which of the following columns of the worksheet are the most helpful? Prepaid Insurance Explanation Prepaid Rent, $900; Rent Expense, $300. The following data were taken from the accounting records of Lorenzo Company. (All accounts have normal balances.) The balance sheet captures a snapshot of a company at a given point in time. What is the difference between Allowance for Doubtful Accounts and Bad Debt Expense? If so, does the closing entry require a debit or a credit to the account? A credit to retained earnings of $2,550 (to close the service revenue, interest expense, and operating expenses accounts) will increase retained earnings by $2,550. Revenue B. (a) True (b) False. The first of the year-end closing entries should include which of the following line items? 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. Operating Expenses |15,500 On December 31, 2007, Bert's Farm Store had the following account balances in its accounting system. True or false? Which of the following is a permanent account? Categorize the following account as temporary or permanent: Wages Payable. a. permanent b. balance sheet c. temporary d. none of the above. True or false? True b. Unearned service revenue debit to Salaries Expense and credit to Salaries Payable. b. OB. Which of the following statements is true if the income statement credit column exceeds the income statement debit column on a worksheet? Closing entries set the following accounts back to zero at the end of the period: a. Multiple Choice Assets, such as prepaid insurance, normally have a debit balance; that is, debits increase those accounts. Closing entries with net income after all revenue and expense accounts have been closed at the end of the fiscal year. You can see that for the date, it is written as Year ended December 31, YYYY. Cost of Goods Sold $380,000 Accumulated Depreciation-Building $39,000 Accounts Payable 22,000 Cash 55,00 Bad Debt Expense is a/an ____ (asset/liability/etc.) True or false? Multiple Choice Which of the following is a permanent account? Post the closing entries to Income Summary and Retained Earnings. Closing Entries. Selected accounts of Sparkle Electrical, Inc., at April 30, 2018, follow. a. Explanation Zero out the revenues, expenses, and drawing. D. Service fees earned. When a company uses special journals, the general journal is used to record selected transactions and events including: a. 2) Fees Earned. Accounts Payable The purpose of closing entries is to transfer information from income statement accounts and from the dividend account to the balance sheet. What are the steps in the closing process? True or false? $24,400, $19,900 Total revenues for the period are $55,200, total expenses are $39,800, and dividends are $9,000. Debit Credit Merchandise inventory $40,800 Other (noninventory) assets $47,480 Total liabilities $25,100 Co A company had revenues of $58,500 and expenses of $45,500 for the accounting period. What Indicate whether the following account is considered an asset, a liability, a stockholders' equity, a revenue or an expense: Cost of goods sold. On August 1, 2012, Ken Wade created. Multiple Choice Should the Accumulated Depreciation account be closed at year-end? $12,500 This indicates that Gibbs has collected cash for services to be provided in the future. True or false? Salary Expense b. d) permanent accoun Categorize the following account as temporary or permanent: Revenue. Explain. Cost of goods sold is: A) A revenue account. A credit to Prepaid Insurance for $400 Accounts Payable c. Service Revenue d. Accumulated Depreciation. Income Summary is a permanent account only used for the closing process. Is this statement correct or not? Which of the following statements is true of the worksheet? Sales c. Account receivable d. Both (a) & (c). Permanent accounts are accounts that show the long-standing financial position of a company. Explanation The balances of these accounts areeventually used to construct the income statement at the end of the fiscal year. Prepaid insurance Every entry (not only closing entries) must include at least one debit to an account and at least one credit to an account. Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance. Which of the following accounts is not closed? True. 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. Which of the following statements regarding closing journal entries is correct? Explanation A. debit Capital; credit the expense accounts B. credit Income Summary; debit the expense accounts C. debit Income Summary; credit the expense accounts D. cre Income Summary: A. is a temporary account. Below are examples of closing entries that zero the temporary accounts in the income statement and transfer the balances to the permanent retained earnings account.
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