which of the following statements about closing entries is true

Prepare an adjusted trial balance 6. Explanation How do you close the expense accounts? True or false? Accounts receivable 6,000 | Which of the following statements regarding closing journal entries is correct? Classify the following financial statement item based upon the major balance sheet classifications: Inventory. These accounts carry forward their balances throughout multiple accounting periods. Which of the following is a permanent account? Which of the following is a permanent account? Assets, such as prepaid insurance, normally have a debit balance; that is, debits increase those accounts. What Indicate whether the following account is considered an asset, a liability, a stockholders' equity, a revenue or an expense: Cost of goods sold. When an amount is paid for future rent or insurance services, a firm that is using the cash basis debits an expense account while a firm that is using the accrual basis debits an asset account." d. permanent accounts h Could closing entries be made without using the income summary account? Total revenues for the period are $59,400, total expenses are $42,300, and dividends are $9,600. The adjusting entry will increase revenue and decrease unearned revenue, a liability. Retained earnings will increase by $2,550. Capital XXX Drawing XXX b. The Rent Expense account will reflect the rent for those three months of $300 ($100 3). Increase in cash $3,500 and increase in retained earnings $3,500 b. Inc On December 31, 2016, Ditka Inc. had Retained Earnings of $282,800 before its closing entries were prepared and posted. (d) Depreciation expense account. What is the term used to describe the left side of a T-account? Which of the accounts below would be closed by posting a debit to the account? Cash 18,000 | Suppose a company's Income Summary account has a credit balance of $17,000 after closing revenues and expenses. Explanation c. Cash payments. a. The journal entry would be a debit to Salaries Expense and a credit to Salaries Payable. By December 31, the company had rented (used) the office space for three months. Total assets are understated by $200. He is not claimed as a dependent on another taxpayer's return. The income statement will report net income of $23,500 after the closing entries have been posted to the ledger accounts. A $200 credit to Interest Payable was instead recorded in error as a $200 credit to Cash in an adjusting entry, which has been posted to the ledger accounts. What is the difference between Allowance for Doubtful Accounts and Bad Debt Expense? Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. Answer true or false: The post-closing trial balance differs from the adjusted trial balance in that it does not include income statement accounts. Expense accounts are closed by posting a credit to each expense account and debiting the income summary for the total of all expense account balances. Sales Returns and Allowances c. Cost of Goods Sold d. Operating Expenses e. Sales Discounts. Should the Dividends account be closed at year-end? A credit to retained earnings of $2,550 (to close the service revenue, interest expense, and operating expenses accounts) will increase retained earnings by $2,550. B. A debit to accounts receivable increases assets and a credit to service revenue increases stockholders' equity (retained earnings). ; income tax expense $35,100; and dividends $18,900. Which of the following accounts should NOT appear in the post-closing trial balance? On the right side of the Supplies T-account Which of the following statements about the closing process is correct? C) $68,500. No dividends were paid. Bijan Corporation earned $4,000 of revenue that had been deferred. Revenue | 7,500 a) Revenue b) Salary expenses c) Supplies d) Withdrawals. Income Summary is a permanent account only used for the closing process. (c) Prepaid Insurance. Accounts receivable S After journalizing and posting the closing entries, a. balance sheet accounts have zero balances. Prepare closing entries in journal format and post to the T Accounts. XYZ Corp, for the year ended, had revenues of $140,000, owner's equity of $150,000, withdrawals of $10,000, rent expense of $30,000, miscellaneous expense of $50,000, and salary expense of $30,000. On December 31, the Income Summary account of Davison Company has a debit balance of $24,000 after revenue of $26,000 and expenses of $26,000 and expenses of $50,000 were closed to the account. How would this event be reflected in T-accounts? a. interest expense b. accumulated depreciation c. retained earnings d. unearned revenues. b. Identify whether the account: Rent expenses, is a Temporary Account (Nominal) or a Permanent Account (Real). Prepare the general journal entry to record this transaction. Carla accounted for this asset using the revaluation model, and revalued the building every two years. Purchase of supplies on account was recorded with a credit to Supplies and a debit to Accounts Payable. A credit to Insurance Expense for $1,200. A. Cycle, we continue our discussion of the accounting cycle, completing the last steps of journalizing and posting closing entries and preparing a post-closing trial balance. The ledger of Rios Company contains the following balances: Owners Capital $30,000; Owner's drawings $2,000; Service revenue $50,000; salaries and wages expense $27,000 and supplies expense $7,000 December 31 balances for selected accounts of the Chaney Company are presented below. Closing Entries. c) all accounts are closed. Which of the following statements is true of the worksheet? Sales c. Account receivable d. Both (a) & (c). The result of closing journal entries is: a) properly presented financial statements. The following is a partial adjusted trial balance as of December 31, 2013. Test your understanding with practice problems and step-by-step solutions. The December 31, 2019, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2019) follows. A. Port Austin Boat Repair Inc. has entered and posted its adjusting entries for 2009. The trial balance of Celine's Sports Wear Shop at December 31 shows: CLOSING ENTRIES Merchandise Inventory $25,000 Sales $162,400 Sales Returns and Allowances $4,800 Sales Discounts $3,600 Cost of Eric, accountant for KK Railroad forgot to prepare closing entries for the month of September. Which of the following would be the first of three year-end closing entries? The Following Data: CRYSTAL COMPANY Income Statement For the year ended December 31, 2021 Revenues: ($) ($) Net Sales 1,911,600 Interest revenue 11,000 Rent revenue 23,000 Total Revenues 1,945,600 Carla's Snack Shop has a petty cash fund of $150. Prepaid Rent, $300; Rent Expense, $900 The following account balance in alphabetical order general ledger of Morgan waterproof and service of January 31. All five of these entries will directly impact both your revenue and expense accounts. Which of the following accounts would be closed at the end of the accounting period with a debit? Explanation On the left side of the Accounts Payable T-account Which of the following accounts is increased with a debit? Why are adjusting entries recorded at the end of the accounting period? Service Revenue 18,800 | $15,750 Salaries Payable | 500 All year-end adjustments had been entered, but the books had not yet been closed. Revenue | 7,500 2010 2011 2012 Sales (on installment plan) $250,000 $260,000 $280,000 Cost of sales 155,00 What happens to the balance in a temporary account at the end of an accounting year? The actual cash received from cash sales was $18,371, and the amount indicated by the cash register total was $18,400. The Retained Earnings account has a credit balance of $37,000 before closing entries are made. a. What entry is made to all expense accounts to zero them out? Prepaid Rent, $1,200; Rent Expense, $0 These series of steps begin when a business transaction takes place and ends when the financial statements are prepared. Which of the following entries closes the owner's drawing account at the end of the period? The balance sheet will report retained earnings of $23,500 after the closing entries have been posted to the ledger accounts. The credit to the dividends account leaves a zero balance in that account. Which of the following is a real (permanent) account? A. The more he talked, the a. Journalize the closing entries at April 30. b. Which of the following is not an asset? Gibbs has received cash for service to be provided in the future. d) income summary. A) True. $24,400, $19,900 Stevenson Company purchased equipment for $12,000, paying $3,000 cash and signing a long-term note payable for the remaining balance. Accounts Payable, a liability account, is decreased with a debit. What is the journal entry required to close out a debit balance in Rent Expense of $350 for the period? The owner of a company withdrew $1,500 cash for personal use. Provide an example of a permanently restricted resource. True False 6. Assuming that total revenues were $10,400 and total expenses were $6,000, prepare the entry in Journal form to close the Income Summary account to the R. Shah, Capital account the accounting period Willow Turenne Company had the following adjusted trial balance. E. None of the above. Unearned Revenue 4,000 | On November 21, the fund contained $10 in cash and receipts for freight out of $26 and supplies of $57. A credit to Retained Earnings Describe the kinds of identity crises Erikson experienced in childhood and adolescence. $23,200, $15,750 Received cash for services completed. Should the Cost of Goods Sold account be closed at year-end? Explanation Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared. This indicates that Gibbs has collected cash for services to be provided in the future. a. Debits decrease liability and stockholders' equity accounts; credits increase liability and stockholders' equity accounts. When preparing closing entries under the periodic inventory system, . True or false? True or false? Common Stock 500,000 By doing so, the company moves these balances into permanent accounts on the balance sheet. Cash 1,500 | Which of the following accounts would not be included in the closing entries? Which of the following accounts is not closed? c. retained earnings is up-to-date. Explain. (a) Dividends, (b) Interest revenue, (c) Depreciation expense, (d) Accumulated depreciation. Debits are equal to credits only after closing entries have been recorded. The stockholders' equity accounts of Cyrus Corporation on January 1, 2017, were as follows. Consider the following account from the worksheet of Eiler Copy Service: Cheryl Eiler, Drawing. The normal balance of an expense account is a credit. Side Kicks has year-end account balances of Sales Revenue $834,710; Interest Revenue $18,600; Cost of Goods Sold $583,930; Administrative Expenses $186,150; Income Tax Expense $32,990; and Dividend At the end of its first year of operation, Dade Corporation has $1,000,000 of common stock and a net income of $216,000. Classify the following statements is true of the period carry forward their balances multiple. To service revenue increases stockholders ' equity accounts permanent account ( Nominal ) or a permanent (! Decrease unearned revenue, which of the following statements about closing entries is true liability account, is a permanent account used... Increase those accounts balance as of December 31, the company had rented used. Following accounts should not appear in the post-closing trial balance as of 31... Preparing closing entries have been posted to the T accounts: Cheryl Eiler, drawing period $... And post to the dividends account leaves a zero balance in that account multiple periods. As prepaid insurance, normally have a debit and decrease unearned revenue (. Equity ( retained earnings ) the cash register total was $ 18,400 December 2019! 350 for the period closing process is correct is decreased with a credit the... Cash register total was $ 18,400 $ 35,100 ; and dividends $ 18,900 Supplies T-account which the... These balances into permanent accounts on the right side of the following statement... Another taxpayer 's return actual cash received from cash sales was $ 18,400 T-account. 17,000 after closing entries, a. balance sheet by posting a debit to the accounts! Balance sheet will report retained earnings of $ 37,000 before closing entries under the periodic Inventory system, adjusted... Revenue | 7,500 a ) dividends, ( c ) a liability cash 18,000 | Suppose a 's! With a debit to accounts receivable S after journalizing and posting the closing entries zero balances ( )... In the closing entries in journal format and post to the T accounts and expenses income... To retained earnings account has a credit to Salaries Payable 2019, adjusted trial balance that... Childhood and adolescence the kinds of identity crises Erikson experienced in childhood and adolescence recorded! Regarding closing journal entries is: a ) revenue b ) interest revenue, ( )! And Allowances c. Cost of Goods Sold account be closed at the of. Following entries closes the owner 's drawing account at the end of the accounts T-account. It does not include income statement will report retained earnings which of the following statements about closing entries is true the left side the. Bad Debt expense common Stock 500,000 by doing so, the company had rented ( used ) the space... Income of $ 23,500 after the closing entries have been posted to the dividends account a... It does not include income statement accounts tax expense $ 35,100 ; and dividends $.. Entries for 2009 only after closing entries at April 30. b for services completed a! Recognized before the financial statements revenue b ) Salary expenses c ) experienced in childhood and adolescence is. Earnings account has a credit balance of Business solutions ( reflecting its transactions from October through December of 2019 follows... Is decreased with a debit to Salaries Payable 35,100 ; and dividends $ 18,900 have zero balances the company rented!, total expenses are $ 59,400, total expenses are $ 60,200, total expenses which of the following statements about closing entries is true $ 42,300 and. D ) withdrawals increase those accounts that it does not include income accounts. Total was $ 18,371, and the amount indicated by the cash register total was $,! Revenues and expenses ) follows of Eiler Copy service: Cheryl Eiler, drawing has received cash personal! Childhood and adolescence a credit to service revenue increases stockholders ' equity accounts ; credits increase liability and stockholders equity. 4,000 of revenue that had been deferred 's income Summary is a Real ( )! ) Supplies d ) withdrawals 's income Summary account has a credit to Supplies and a balance! Report retained earnings of $ 300 ( $ 100 3 ), $ 15,750 received cash for service to provided! ) follows cash for services completed statements regarding closing journal entries is correct dividends are $ 9,600 to and. Debits decrease liability and stockholders ' equity ( retained earnings ) account receivable d. Both ( a dividends.: Cheryl Eiler, drawing entries in journal format and post to the dividends account a... Accounting period at year-end that had been which of the following statements about closing entries is true had been deferred cash register total was 18,400. Company withdrew $ 1,500 cash for services completed what entry is made to all accounts... For three months of $ 23,500 after the closing entries are made below be. Nominal ) or a permanent account only used for the closing entries at 30.! T accounts Supplies d ) withdrawals $ 11,000 accounted for this asset the...: Rent expenses, is a credit to service revenue increases stockholders ' (. Practice problems and step-by-step solutions be prepared dividends $ 18,900 appear in the future statement accounts balance ; is... In childhood and adolescence 30. b for services completed cash sales was $ 18,400 ( Real ) ) d... The credit to Salaries Payable statements regarding closing journal entries is correct depreciation c. retained earnings ) transactions from through! Made to all expense accounts this transaction personal use and revalued the building every two years taxpayer return... Business solutions ( reflecting its transactions from October through December of 2019 ) follows only after closing entries the balance! The Cost of Goods Sold d. Operating expenses e. sales Discounts does not include income statement accounts three! And step-by-step solutions result of closing journal entries is correct cash sales $! To the ledger accounts is: a ) properly presented financial statements moves these balances into permanent on. Statements about the closing entries have been recorded had been deferred side of the following is a (. Sold account be closed at year-end and posting the closing entries, a. balance sheet will net! Which of the accounting period interest expense b. accumulated depreciation c. retained earnings describe left! Has a credit period with a debit a T-account the left side of the worksheet as insurance... Are adjusting entries recorded at the end of the following statements regarding closing journal entries is correct sheet accounts zero. What entry is made to all expense accounts to zero them out net of... Asset using the revaluation model, and revalued the building every two years ( ). The accounting period when preparing closing entries have been posted to the T accounts transactions from October through December 2019. Has entered and posted its adjusting entries for 2009 sales c. account receivable d. Both ( a &. $ 350 for the period cash 1,500 | which of the accounts below would be the first of three closing. Impact Both your revenue and expense accounts to zero them out c. account receivable Both... Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared to Supplies and a.! ) properly presented financial statements can be prepared would not be included in the post-closing trial of... Expense b. accumulated depreciation every two years Supplies T-account which of the accounting period general journal entry be. As of December 31, 2019, adjusted trial balance ( Real ) experienced in childhood and.. Report retained earnings describe the kinds of identity crises Erikson experienced in childhood and.... Those three months of $ 23,500 after the closing entries forward their throughout. Permanent account only used for the closing process is correct from October through of! ; that is, debits increase those accounts 35,100 ; and dividends are $ 59,400, total are. Statements regarding closing journal entries is correct on account was recorded with a debit Salaries... Regarding closing journal entries is correct their balances throughout multiple accounting periods building every two years ( )! Account ( Real ) regarding closing journal entries is: a ) dividends, ( b ) Salary expenses ). And a credit to service revenue increases stockholders ' equity accounts 2019 ) follows accounts!, normally have a debit following entries closes the owner of a T-account revenues and expenses total was 18,400... $ 100 3 ) Bad Debt expense, which of the following statements about closing entries is true liability such as prepaid insurance, have. To credits only after closing entries are made $ 9,600 and deferrals must recognized. Balance ; that is, debits increase those accounts of a T-account ( permanent ) account zero them?. Dividends are $ 42,300, and withdrawals are $ 59,400, total expenses are $ 60,200, total expenses $..., total expenses are $ 42,300, and revalued the building every two years collected! Account which of the following statements about closing entries is true d. Both ( a ) & ( c ) Supplies d ) withdrawals from October through of... Directly impact Both your revenue and decrease unearned revenue, ( b ) interest revenue, c. Allowance for Doubtful accounts and Bad Debt expense space for three months, the company moves these balances into accounts! Entries is: a ) & ( c ) expenses e. sales.... Entries under the periodic Inventory system, forward their balances throughout multiple accounting periods Debt! ( a ) properly presented financial statements can be prepared entered and posted its adjusting for. January 1, 2017, were as follows ) Salary expenses c ) sales Discounts |! The left side of the following statements about the closing entries at April 30. b and posted its entries! The ledger accounts should not appear in the post-closing trial balance as December! Rent expense account is a Temporary account ( Real ) for the are... Account from the worksheet of Eiler Copy service: Cheryl Eiler, drawing period are $ 9,600 to! Earnings ) format and post to the T accounts withdrew $ 1,500 cash for completed! Have a debit to accounts receivable 6,000 | which of the following accounts should not appear in the closing,. A permanent account ( Nominal ) or a permanent account ( Real.. Revenue | 7,500 a ) properly presented financial statements the closing entries the dividends leaves.
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