accounting class unit 8

acadasd

The balances of temporary accounts (not asset accounts) are reduced to zero for the next period.

false

Temporary accounts are also called nominal accounts.

true

The balances of temporary (not permanent) accounts are transferred to the owner’s capital account.

false

Permanent accounts accumulate information continuously until transferred or adjusted.

true

Adjusting entries are different from closing entries. Journal entries used to prepare temporary accounts for a new period are closing entries.

false

The drawing account is a temporary account.

true

Temporary accounts begin each fiscal period with a zero balance.

true

The Income Summary account does not always have a normal credit balance; it depends on the net income or loss.

false

Ending balances of temporary accounts from one period are not carried over; their closing balances help determine beginning capital for the next period.

true

The new capital balance is verified by comparing it with the statement after closing entries are posted.

true

Temporary accounts include revenues, expenses, and drawing, but not liabilities.

false

To close a temporary account, an entry is made on the opposite side of its balance.

true

A post-closing trial balance checks for the equality of debits and credits after closing entries.

true

The process described is the accounting cycle.

true