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Exam 6: Closing Entries and the Postclosing Trial Balance

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Question 1

True/False

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The heading "Closing Entries" is usually written in the Description column of the general journal above the first closing entry.

A) True
B) False

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Question 2

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The entry to close the Accumulated Depreciation account may include a debit to

A) the Income Summary account and a credit to the Accumulated Depreciation account.
B) the Depreciation Expense account and a credit to the Accumulated Depreciation account.
C) the Accumulated Depreciation account and a credit to the Income Summary account.
D) none of the above.

E) B) and C)
F) C) and D)

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Question 3

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After all the closing entries are posted to the ledger, the Income Summary account will have a ____________________ balance.

Match the accounting terms with the description by entering the proper number.

On December 31, the Income Summary account of Coulter Company has a credit balance of $20,000 after revenue of $89,000 and expenses of $69,000 were closed to the account. Joseph Coulter, Drawing has a debit balance of $3,000 and Joseph Coulter, Capital has a credit balance of $45,000. Record the journal entries necessary to complete closing the accounts. Use 14 as the general journal page number. Then, post the closing entries to the Joseph Coulter, Capital account.

The firm had net income if the entry to close the Income Summary account is recorded as a ____________________ to the owner's capital account.

The entry to close the Depreciation Expense account would include a debit to

When done properly, how many journal entries are involved in the closing process?

The temporary owner's equity accounts are closed because they apply to only one accounting period.

Which of the following accounts is a permanent account?

One of the purposes of closing entries is to transfer net income or net loss for the period to the owner's capital account.

If a business has a net loss for a fiscal period, the journal entry to close the Income Summary account is

The Income Summary and Karen Randall, Capital accounts for Randall Printing Company at the end of its accounting period follow. Complete the following statements. A. Total revenue for the period is ____________________. B. Total expenses for the period are ____________________. C. Net income (loss) for the period is ____________________. D. Owner's withdrawals for the period are ____________________.

Entries required to zero the balances of the temporary accounts at the end of the year are called

Managers often consult financial statements for specific types of information. Indicate whether each of the following items would appear on the income statement, statement of owner's equity, or the balance sheet. Note that an item may appear on more than one statement. The first item is completed as an example.

One purpose of closing entries is to

Dorsey Company's partial worksheet for the month ended March 31, 2013, is shown below. Open the owner's capital account (account number 301) in the general ledger and record the March 1, 2013, balance of $32,000 shown on the worksheet. Journalize the closing entries on page 3 of a general journal. Post the closing entries to the owner's capital account. Prepare a postclosing trial balance.

The ____________________ entries reduce the balances of the revenue, expense, and drawing accounts to zero so that they are ready to receive data for the next period.

The entry to close the revenue account Fees Income requires a debit to that account.

Which of the following entries records the closing of Penny Pincher, Drawing at the end of the accounting period?