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Exam 6: Closing Entries and Teh Postclosing Trial Balance

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Question 21

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The entry to close the owner's drawing account would include a debit to the:

A) owner's drawing account and a credit to the Income Summary account.
B) owner's capital account and a credit to the owner's drawing account.
C) owner's drawing account and a credit to Cash.
D) Income Summary account and a credit to the owner's drawing account.

E) A) and B)
F) A) and C)

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Question 22

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Match the accounting terms with the description by entering the proper letter in the space provided. A. Closing entries B. Income Summary account C. Interpret D. Post-closing trial balance ________ 1. To understand and explain the meaning and importance of something (such as financial statements) ________ 2. Journal entries that transfer the results of operations (net income or net loss)to owner's equity and reduce the revenue, expense, and drawing account balances to zero 3. A statement that is prepared to prove the equality of total debits and credits after the closing process is completed ________ 4. A special owner's equity account that is used only in the closing process to summarize the results of operations

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(1) C, (2)...

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Question 23

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After all the closing entries are posted to the ledger, the Income Summary account will have a________ balance.

Which of the following accounts has a normal debit balance?

The first two closing entries to the Income Summary account indicate a debit of $47,000 and a credit of $41,000. The third closing entry would be:

All of the following accounts will appear on the post-closing trial balance except:

Managers often consult financial statements for specific types of information. Indicate whether each of the following items would appear on the income statement, statement of owner's equity, or the balance sheet. Note that an item may appear on more than one statement. The first item is completed as an example. $\begin{array} { | l | l | l | l | } \hline & \begin{array} { c } \text { Income } \\\text { Statement }\end{array} & \begin{array} { l } \text { Statement of } \\\text { Owner's } \\\text { Equity }\end{array} & \text { Balance Sheet } \\\hline \text { Accounts Payable } & & & \mathrm { X } \\\hline \text { Accounts Receivable } & & & \\\hline \text { Accumulated Depreciation - Equipment } & & & \\\hline \text { Cash } & & & \\\hline \text { Depreciation Expense - Equipment } & & & \\\hline\end{array}$ $\begin{array} { | l | l | l | l | } \hline \text { Equipment } &\quad\quad &\quad\quad &\quad\quad \\\hline \text { Fees Income } & & & \\\hline \text { N. Dalton, Capital, beginning of period } & & & \\\hline \text { N. Dalton, Capital, end of period } & & & \\\hline \text { N. Dalton, Drawing } & & & \\\hline \text { Rent Expense } & & & \\\hline \text { Salaries Expense } & & & \\\hline \text { Supplies } & & & \\\hline \text { Supplies Expense } & & & \\\hline \text { Total assets of the business } & & & \\\hline \text { Total expenses for the period } & & & \\\hline \text { Total liabilities of the business } & & & \\\hline \text { Total revenues for the period } & & & \\\hline\end{array}$

The partial worksheet for the Jamison Company showed the following data on October 31, 2019. Record the closing entries on page 6 of a general journal.

Which of the following accounts has a normal credit balance?

The ________ entries transfer the results of operations to owner's equity.

The final closing entry transfers the balance of the ________ account to the owner's capital account.

Information in the financial statements provides answers to many questions, including:

The postclosing trial balance contains balance sheet accounts only.

The asset, liability, and owner's capital accounts appear on all of the following except the:

Withdrawals by the owner for personal use do not affect net income or net loss of the business.

When done properly, how many journal entries are involved in the closing process?

The entry to close the revenue account, Fees Income, requires a debit to that account.

The adjusted ledger accounts of RD Consulting on December 31, 2019, appear as follows. All accounts have normal balances and adjusting entries have been made. Extend the balances to the Balance Sheet and Income Statement columns of the worksheet. Then, journalize the closing entries on page 4 of a general journal.

If the Income Summary account has a debit balance before it is closed, the firm experienced a net________ from operations.

Use the following account balances from the adjusted trial balance of Gees Catering: Select the correct closing entry that Gees Catering would make to close the owner's withdrawal account at the end of the accounting period.