Accounting Closing Entries

false

Closing entries transfer the net income or net loss to the withdrawals account

true

to close a rev acct, debit it for the amount of its credit balance

true

rev and exp accounts must be closed out because their balances apply to only one accounting period

false

when expense accounts are closed the Income Summary account is credited

true

the income summary accounts is a simple income statement in the ledger

false

before closing entries are journalized and posted the income summary account in the general ledger has a normal credit balance

true

after the closing entries have been posted, the balance in the capital acct reflects the net income or net loss with the withdrawals for the period

true

the income summary acct is located in the owners equity section of the general ledger

true

the last step in the accounting cycle is the preparation of the post closing trial balance

true

to close withdrawals acct the amount of its balance is debited to the capital account and credited to the withdrawals account

true

if a business reports a net loss for the period, the journal entry to close the Income Summary acct would be a debit to capital and a credit to Income Summary

false

closing the revenue acct is the second closing entry

second closing entry

transferring the exp acct balances to the income summary acct is the

capital

which of the following accts is not closed at the end of the acct period

fees

income summary

maintenance exp

capital

income sum acct is located int he oe section of the general ledger

which of the following statements is true

income sum acct is located int he oe section of the general ledger

the incom sum acct has a normal debit balance

the income summ acct is a permanent acct

the income summary account is used throughout the acct period

temporary accts

accts that start each new acct period with zero balances are

a debit to income sum a credit to owners capital

if a business has a net income for the period the journal entry to close the balance of the income summary account is

credit side of the income summary

the bal of the rev acct is transferred to the

temporary capital accounts

accounts that start and accounting period with zero balances are called

capital account

closing entries are used to transfer the net income or net loss for the accounting period to the

permanent accounts

only _____ and their balances are posted on the post closing trial balance

compound entries

is a journal entry with two or more debits or two or more credits

income summary

is a general ledger acct used to accumulate and summarize the rev and expenses for the period

closing entries

are made to close out or reduce to zero the balance of certain general ledger accounts

rev

closing rev- what’s debited

income summary

closing rev- whats credited

income summary

closing entry for income sum when net income- what’s debited

capital

closing entry for income sum when net income- what’s credited

capital

closing entries for withdrawals- what’s debited

withdrawals

closing entries for withdrawals- what’s credited

revenue

1st closing entry

expenses

2nd closing entry

income summary

3rd closing entry

withdrawals

4th closing entry

post closing trial bal

is prepared to prove that debits in the ledger acct are equal to the credits after the closing entries have been posted