Accounting Unit 5

The closing entry process consists of closing

All temporary accounts

The final closing entry to be journalized is typically the entry that closes the

Drawing account

Closing entries are made

In order to transfer net income (or loss) to the capital account

Which of the following statement is correct about temporary accounts?

It is closed at the end of each accounting period

The final step in the accounting cycle is to prepare

A post-closing trial balance

After all the closing entries have been posted, the balance of the income summary account will be

Zero

The post-closing trial balance will

Contain only balance sheet accounts

A post-closing trial balance will show

Only permanent account balances

In preparing closing entries

Each expense account will be credited

Which of the following accounts will not have a balance in post-closing trial balance?

Revenue, Withdrawals, Expenses

Which asscounts are considered a permanent accounts?

Assets, Liabilities, Capital

Cash and Account receivable are referred to as a

Permanent Accounts

Which of the following is an appropriate closing entry of food sales account?

Debit Food Sales and other revenues Credit Income Summary

Which of the following is an appropriate closing entry of accounts payable?

This account will not be closed at the end of the accounting period

Which of the following is an appropriate closing entry of depreciation expense?

Debit Income Summary Credit Depreciation expense

In preparing closing entries for a merchandiser, the Income Summary account will be credited for the balance of

Sales

The third step in preparing closing entries requires transferring the ______ to the appropriate owner’s capital account.

Income Summary

Which of the following is an appropriate closing entry of the owner’s withdrawal for Sweet Potato Restaurant?

Debit Sweet potato’s capital Credit withdrawals