Accounting Chapter 8 Study Guide and Vocab

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Permanent Accounts (Real)
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Used to accumulate information from one fiscal period to the next. (p.214)
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Temporary Accounts (Nominal)
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Used to accumulate information until it is transferred to the owner’s capital account. (p.214)
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Closing Entries
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Journal procedures used to prepare temporary accounts for a new fiscal period. (p.214)
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Post-Closing Trial Balance `
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Prepared after the closing entries are posted. (Balance) (p.227)
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Accounting Cycle
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The series of accounting activities included in recording financial information for a fiscal period. (p.228)
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The Closing Entry for Sales
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Debit: Sales Credit Income Summary (p.217)
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The Closing Entry for All Expense Accounts
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Debit: Income Summary Credit: All Expense Accounts (p.219)
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The Closing Entry for Income Summary with a Net Income
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Debit: Income Summary with Net Income Amount Credit: Capital Account (p.220)
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The Closing Entry for Income Summary with a Net Loss
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Debit: Loss to Capital Account Credit: Income Summary (p.220)
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The Closing Entry for Owner’s Drawing Account
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Debit: Capital Credit: Drawing (p.221)
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The accounting concept that applies when a worksheet is prepared at the end of each fiscal cycle to summarize the general ledger information needed to prepare financial information.
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Accounting Period Cycle (p.214)
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The ending account balances of permanent accounts for one fiscal period are…
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…the beginning account balances for the next fiscal period. (p.214)
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Example of a Temporary Account
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Rent Expense and other expense accounts (p.214)
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Which accounting concept applies when expenses are reported in the same fiscal period that they were used to produce revenue?
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Matching Expenses with Revenue (p.216)
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When Revenue is greater than total expenses, resulting in a net income, the Income Summary account has a ________.
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Credit Balance (p.216)
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Information needed for recording the closing entries is obtained from the ____.
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Work Sheet’s Income Statement and Balance Sheet Columns (p.216)
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Income Summary is a ____.
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Temporary Account (p.216)
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After the closing entries are posted, the Sales account balance should be _______.
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Zero (p.218)
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After the closing entries are posted, the owner’s capital account balances should be the same as shown ________.
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In the work sheet’s Balance Sheet Debit Column. (p.221)
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The accounts listed on a post-closing trial balance are _____.
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This that appear in the work sheet’s Trial Balance columns. (p.227)

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