ACCT Chapter 6 – Flashcards
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After closing entries are posted, the revenue, expense, and drawing accounts will have zero balances.
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true
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One of the PurPoses of closing entries is to transfer net income or net loss for the period to the owner's capital account.
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true
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Before the Income Summary account is closed, its balance represents the net income or net loss for the accounting period.
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true
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The owner's capital account is closed at the end of each accounting period.
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false
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The entry to close the revenue account Fees Income requires a debit to that account
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true
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The entry to close an expense account requires a credit to the Income Summary account.
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false
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At the end of each accounting period, asset and liability account balances are reduced to zero.
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false
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A postclosing trial balance will not contain revenue and expense account balances
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true
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Adjusting entries must be journalized and posted before the closing entries are journalized and posted.
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true
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The Balance Sheet section of the worksheet contains the data that is used to make closing entries .
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false
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The Income Summary account is a temporary owner's equity account.
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true
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The balance of the owner's drawing account will appear on the postclosing trial balance
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false
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The Income Summary account is used only at the end of an accounting period to help with the closing procedure .
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true
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"Closing" is written in the Description column of the individual revenue and expense accounts in the general ledger.
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true
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A compound entry in the general journal is made to close expense accounts.
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true
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The entry to transfer net income to the owner's capital account would include a debit to the owner's capital account
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false
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Withdrawals by the owner for personal use do not affect net income or net loss of the business.
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true
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After the closing entries are posted, the balance of the owner's capital account agrees with the amount of owner's equity shown on the balance sheet for the period.
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True
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The temporary owner's equity accounts are closed because they apply to only one accounting period.
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True
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Interpreting the financial statements is the last step in the accounting cycle.
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True
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Income and Expense Summary is an other name for the Income Summary account
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True
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The owner's drawing account is closed to the Income Summary Statement
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False
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The postclosing trial balance contains balance sheet accounts only
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True
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The heading Closing Entries is usually written in the Description column of the general journal above the first closing entry
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True
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"After-closing trial balance" is another name for the postclosing trial balance.
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True
