Accounting I Study Guide Chapter 8 – Flashcards
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Permanent Accounts
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Accounts used to accumulate information from one fiscal period to the next
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Temporary Accounts
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Accounts used to accumulate information until it is transferred to the owner's capital account
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Closing Entries
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Journal entries used to prepare temporary accounts for a new fiscal period
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Post-Closing Trial Balance
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A trial balance prepared after the closing entries are posted
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Accounting Cycle
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The series of accounting activities included in recording financial information for a fiscal period
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The Accounting Period Cycle is the account concept applied when a work sheet is prepared at the end of each fiscal cycle to summarize the general ledger information needed to prepare financial statements
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True
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The ending account balances of permanent records for one fiscal period are the beginning account balances for the next fiscal period
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True
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Rent Expense is a temporary account
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True
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The Matching Expenses with Revenue is the accounting concept applied when expenses are reported in the same fiscal period that are used to produce revenue
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True
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When revenue is greater than total expenses, resulting in a net income the Income Summary account has a credit balance
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True
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Information needed for recording the closing entries is obtained from the work sheets Income Statement and Balance Sheet columns
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True
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Income Summary is a temporary account
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True
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After the closing entries are posted, the Sales account balance should be zero
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True
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After the closing entries are posted, the owner's capital account balances should be the same as shown on the balance sheet for the fiscal period
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True
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The accounts listed on post-closing trial balance are general ledger accounts with balances after the closing entries are posted
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True
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A worksheet including a trial balance, is prepared from a general ledger
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4th Step
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Transactions, from information on source documents, are recorded in a journal
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2nd Step
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Source documents a checked for accuracy, and transactions are analyzed into debit and credit parts
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1st Step
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Adjusting entires are journalized and posted to a general ledger
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5th Step
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Financial statements are prepared from the work sheet
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6th Step
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Closing entries are journalized and posted to the general ledger
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7th Step
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Journal entries are posted to the general ledger
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3rd Step
