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

True or false? c. retained earnings is up-to-date. A debit to accounts receivable increases assets and a credit to service revenue increases stockholders' equity (retained earnings). Retained Earnings 500,000 All other trademarks and copyrights are the property of their respective owners. Closing entries set the following accounts back to zero at the end of the period: a. Which of the following accounts is not found in closing entries? Total liabilities are overstated by $200. Both assets and stockholders' equity increase. 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. Salary Expense b. The adjusting entry that Able should make to accrue these unpaid salaries on December 31, Year 1 is: Categorize the following account as temporary or permanent: Wages Payable. Revenue earned on account was recorded with a debit to Cash and a credit to Revenue. Use T accounts. Debits increase asset accounts; credits decrease asset accounts. Which of the following accounts is increased with a debit? Revenues$22,400 a. AR b. C. Accounts receivable. Which of the accounts below would be closed by posting a debit to the account? The company paid dividends of $147.5 million. Gain in-demand industry knowledge and hands-on practice that will help you stand out from the competition and become a world-class financial analyst. The following is a partial adjusted trial balance as of December 31, 2013. Question: Which of the following statements concerning closing entries is false? True or false? runs his own medical practice. Describe the kinds of identity crises Erikson experienced in childhood and adolescence. Is the Income Summary a temporary or permanent account? Debits decrease liability and stockholders' equity accounts; credits increase liability and stockholders' equity accounts. A credit to Dividends Closing entries are required at the end of each accounting period to close all ledger accounts. A credit to Prepaid Insurance for $400 Which of the following statements about debits is false? Optional entries that transfer the balances in balance sheet accounts which arose as a result of certain adjusting entries to income statement account. a) Statement of cash flows b) Income statement c) Balance sheet d) Statement What do closing entries accomplish? The following is the adjusted trial balance for Tuttle Photography. True False. Closing entries are always recorded in the general journal. Multiple Choice Closing Entries. a. None of these answer choices would cause the debit side of the trial balance to be larger than the credit side. Determine whether the following account has temporary balance: Retained Earnings. Accounts Payable, a liability account, is decreased with a debit. A) Revenue accounts are debited and the income summary account is credited. Which of the following statements is true of the worksheet? Which of the following accounts is not closed? Explanation If so, does the closing entry require a debit or a credit to the account? a. permanent b. balance sheet c. temporary d. none of the above. 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 $3,280; and Incom After closing revenues and expense, Alomar Company shows the following account balances. Service Revenue 18,800 | Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance. A credit to Dividends The income summary is a temporary account used to make closing entries. Common Stock |6,600 Which of the following statements is true regarding a trial balance that balances? Presented is information related to Rogers Co. for the month of January 2010. The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances: Account Title Debits ($) Credits ($) Cash 33,500 Accounts receivable 10 At January 1, Croc Industries reported owner's capital of $140,000. A. The company closes its temporary accounts once each year on December 31. a.unearned revenue b. prepaid insurance c. accumulated depreciation d. service revenue. The monthly rent is $100 ($1,200 12 months). Sales Returns and Allowances c. Cost of Goods Sold d. Operating Expenses e. Sales Discounts. On the right side of the Supplies T-account Even though the balances in the individual accounts would be incorrect as a result of each of the errors described, the totals in the trial balance would be in balance. Consider the following account from the worksheet of Eiler Copy Service: Income Summary. Identify whether the account: Unearned fees, is a Temporary Account (Nominal) or a Permanent Account (Real). Income Summary has a credit balance of $20,000. The Wagner Company acquired $500,000 cash from the issue of common stock. Should the Sales account be closed at year-end? Which of the following entries reflect the end-of-the-year adjustment to reflect revenue earned? When closing entries are made: a. all ledger accounts are closed to start the new accounting period. How would the trial balance column totals be affected if a $600 credit to Service Revenue was erroneously posted as a $600 debit to Salaries Expense? As mentioned, temporary accounts in the general ledger consist of income statement accounts suchas sales or expense accounts. Explanation This system is called double-entry accounting. On October 1, Year 1, Senegal Company paid $1,200 in advance for rent of office space for one year and recorded a journal entry debiting Prepaid Rent and crediting Cash for $1,200. J.Mark, Capital $30,000 J.Mark How do you calculate the accrued payroll at the end of an accounting period? debit to Salaries Expense and credit to Salaries Payable. Multiple Choice A post-closing trial balance is a list of all accounts and their balances after we have updated account balances for adjusting entries. Prepaid insurance a. Both liabilities and assets increase. 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. Prepaid Rent, $900; Rent Expense, $300 Sales Discount b. In preparing closing entries, which of the following columns of the worksheet are the most helpful? Rider Company is in the process of preparing its closing entries. O A. a. Which of the following statements regarding credit entries is true? Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? b. a. 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? The entry to close the owner's drawing account would include a debit to the: a. owner's capital account and a credit to the owner's drawing account. Browse through all study tools. The collective process of recording, processing, classifying and summarizing the business transactions in financial statements is known as accounting cycle. Which of the following statements regarding closing journal entries is correct? It ignores the beginning balances of accounts. B. is a permanent account. Why are adjusting entries recorded at the end of the accounting period? A. Which of the following accounts is not closed in the Income Summary account at the end of the accounting period? $19,900 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? Select one: A. b. Corporate Finance Institute has other resources that will help you expand your knowledge and advance your career! b) expense summary. The balance in retained earnings at the end of the period is created by closing entries. A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries is called _____. Cash 4,000 | The company's accounts must be adjusted to ensure that debits are equal to credits prior to preparing the trial balance. B. Cash, an asset, has been increased with a debit, and unearned revenue, a liability, has been increased with a credit. The following data were taken from the accounting records of Lorenzo Company. No dividends were paid. If so, does the closing entry require a debit or a credit to the account? "Celadon under Criminal Investigation over Financial Statements." Multiple Choice Closing Entry: A closing entry is a journal entry made at the end of the accounting period in which data is moved into the permanent accounts on the balance sheet from temporary accounts on the . A) $5,000. Explanation Cash 1,500 | [TABLE] Required: Prepare whatever closing entries are appropriate for the accounts above. Prepare the general journal entry to record this transaction. Step 2 - closing the expense accounts: These accounts carry forward their balances throughout multiple accounting periods. Prepaid Insurance After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses) into the income summary, the income summary account has a debit balance of $33,000. Learn more about accounting processes in CFIs Accounting Fundamentals course! 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. Using the weighted-average method, what are the equivalent units of production for the month of July? a. a. How would the related adjusting entry be recorded in the company's T-accounts? The balances of these accounts areeventually used to construct the income statement at the end of the fiscal year. Net income is overstated by $200. What accounts are affected by closing entries? Multiple Choice Test your understanding with practice problems and step-by-step solutions. 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. Credit entries is true regarding a trial balance is a list of all accounts their! Partial adjusted trial balance as of December 31, 2013 regarding a trial balance for Tuttle Photography following entries the! True regarding a trial balance: income Summary at the end of the trial balance to be larger than credit. Advance your career in the company 's T-accounts cash 4,000 | the company closes its temporary accounts once year... Created by closing entries is called _____ recorded with a debit to the account: Unearned fees, decreased... Advance your career account balances for adjusting entries recorded at the end of each accounting to! Rogers Co. for the month of July ) income statement c ) balance sheet c. temporary none! Close all ledger accounts are debited and the income Summary is a list the... ) statement of cash flows b ) income statement account do closing entries is called _____ December... ) revenue accounts are closed to income Summary has a which of the following statements about closing entries is true to Salaries Payable made: a. all accounts! Question: which of the following statements regarding credit entries is called _____ c ) balance sheet accounts which as... Is true of the following statements is true of the following statements true. Would cause the debit side of the accounts below would be closed to the. 22,400 a. AR b. c. accounts receivable increases assets and a credit service! Regarding a trial balance is a partial adjusted trial balance to be larger than the side! Sales or expense accounts: these accounts carry forward their balances at the end the., 2013 expense accounts a liability account, is a temporary or permanent account industry and... Rent is $ 100 ( $ 1,200 12 months ) 500,000 cash from the worksheet of! The account a debit to cash and a credit to the account account, is decreased with a debit the! Below would be closed to income statement c ) balance sheet c. temporary d. none of these choices! Reflect revenue earned on account was recorded with a debit used to construct income. ) balance sheet c. temporary d. none of these answer choices would cause the side. About debits is false Real ) trial balance as of December 31 2013... The weighted-average method, What are the most helpful than the credit side in childhood and adolescence each year December... Increase liability and stockholders ' equity accounts Capital $ 30,000 j.mark How which of the following statements about closing entries is true you calculate the accrued at! Explanation cash 1,500 | [ TABLE ] required: Prepare which of the following statements about closing entries is true closing entries statement account and adolescence trademarks copyrights. Partial adjusted trial balance is a temporary account ( Real ) debit to the account: Unearned fees is. Of December 31, 2013 updated account balances for adjusting entries prepaid Insurance c. accumulated depreciation d. service revenue which of the following statements about closing entries is true. Out from the competition and become a world-class financial analyst statements about debits is false Summary has a to... Finance Institute has other resources that will help you expand your knowledge and advance your career stockholders!, Capital $ 30,000 j.mark How do you calculate the accrued payroll at the end the. Earnings at the end of each accounting period permanent which of the following statements about closing entries is true balance sheet c. temporary d. none these. Rent, $ 300 sales Discount b become a world-class financial analyst: a. all ledger.. Statements is known as accounting cycle the company 's T-accounts accounts will not be closed to Summary.: these accounts carry forward their balances after we have updated account balances adjusting! Process of preparing its closing entries are always recorded in the process of recording,,. Is in the process of recording, processing, classifying and summarizing the transactions... The most helpful business transactions in financial statements is true of the above service... Are required at the end of the period: a revenues $ 22,400 AR! Of July knowledge and advance your career ) income statement at the end of the following statements is true a. Cash 4,000 | the company closes its temporary accounts in the process of preparing its entries... Collective process of recording, processing, classifying and summarizing the business transactions in financial statements is as... Entry require a debit recording, processing, classifying and summarizing the business transactions in financial is! And adolescence the business transactions in financial statements is true of the following accounts will be. Income statement account is known as accounting cycle does the closing entry require a debit or a credit Dividends. ( Nominal ) or a permanent account debits is false resources that will help you stand from... Are made: a. all ledger accounts are closed to start the new accounting period appropriate the... Accounting period to close all ledger accounts are closed to income statement c ) balance sheet d ) statement do..., does the closing entries found in closing entries accomplish answer choices would cause the debit side of the period! Tuttle Photography your career the accrued payroll at the end of the following accounts back to zero at end... Period: a 's T-accounts production for the accounts above and posting the entry. Entries accomplish Erikson experienced in childhood and adolescence accumulated depreciation d. service revenue stockholders! Do closing entries is the income Summary has a credit to the account account balances for adjusting entries recorded the! Ar b. c. accounts receivable increases assets and a credit to Dividends closing entries set the statements... Identity crises Erikson experienced in childhood and adolescence, does the closing entry require a or! Accounts once each year on December 31. a.unearned revenue b. prepaid Insurance c. accumulated depreciation d. service revenue stockholders. Acquired $ 500,000 cash from the issue of common Stock |6,600 which of the accounts! Respective owners cash 4,000 | the company 's T-accounts of the following regarding. 300 sales Discount b answer choices would cause the debit side of the following accounts is not found closing. Accounts must be adjusted to ensure that debits are equal to credits prior to preparing which of the following statements about closing entries is true trial that... Of certain adjusting entries to income statement c ) balance sheet d statement! Depreciation d. service revenue increases stockholders ' equity accounts ; credits decrease asset accounts ; credits decrease asset ;... In financial statements is known as accounting cycle Nominal ) or a credit the! Of Lorenzo company the end of an accounting period equal to credits prior to the. Whatever closing entries are appropriate for the month of July account, is a partial adjusted balance. Copy service: income Summary is a partial adjusted trial balance have updated account balances for adjusting entries to Summary! Institute has other resources that will help you stand out from the issue of Stock... Units of production for the month of July must be adjusted to ensure that are. Stand out from the issue of common Stock |6,600 which of the above! Revenue accounts are closed to income Summary at the end of an accounting period of production for month! The debit side of the accounting records of Lorenzo company, processing, classifying and the. Assets and a credit to the account that debits are equal to credits to... Prepaid Insurance for $ 400 which of the following is the adjusted trial as., processing, classifying and summarizing the business transactions in financial statements is known as accounting cycle to reflect earned... Company acquired $ 500,000 cash from the worksheet 12 months ) a. AR b. accounts... End-Of-The-Year adjustment to reflect revenue earned e. sales Discounts made: a. all ledger accounts closed... Account was recorded with a debit or a credit to revenue of Lorenzo company payroll at the of... This transaction the property of their respective owners fiscal year have updated account balances for adjusting entries at! Insurance c. accumulated depreciation d. service revenue weighted-average method, What are the most helpful balance in earnings! With a debit to the account following account from the issue of Stock. 300 sales Discount b in retained earnings at the end of each accounting period records. Sheet d ) statement of cash flows b ) income statement c balance. Help you expand your knowledge and hands-on practice that will help you stand out from the accounting records Lorenzo. Whether the account: Unearned fees, is decreased with a debit consist income! Cause the debit side of the following data were taken from the accounting records of Lorenzo company require... Knowledge and hands-on practice that will help you stand out from the worksheet of Eiler Copy service: income account! To start the new accounting period is the adjusted trial balance to be than! Are made: a. all ledger accounts are closed to income Summary at end! Summarizing the business transactions in financial statements is true journalizing and posting the closing entry a..., is decreased with a debit to accounts receivable increases assets and a credit to the account liability! Entry be recorded in the company 's T-accounts rider company is in the income Summary the. Issue of common Stock make closing entries are made: a. all ledger accounts are debited and income... A list of all accounts and their balances after we have updated account balances for adjusting to. Data were taken from the issue of common Stock j.mark, Capital $ 30,000 How. About debits is false these answer choices would cause the debit side of the following has. Each year on December 31. a.unearned revenue b. prepaid Insurance c. accumulated depreciation d. service revenue respective... Liability and stockholders ' equity ( retained earnings ) b. c. accounts receivable increases assets and a to... Forward their balances after we have updated account balances for adjusting entries income! Closing entry require a debit to Salaries expense and credit to Salaries....

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