Exam 5: The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed.

N	X	0. Advertising Expense
________	________	1. Prepaid Insurance
________	________	2. Service Fees
________	________	3. Depreciation Expense
________	________	4. Accumulated Depreciation
________	________	5. Salaries Payable
________	________	6. Prepaid Rent
________	________	7. Income Summary
________	________	8. Insurance Expense

Which of the following columns of the worksheet are referred to when preparing closing entries to the Income Summary?

After closing the revenue and expense accounts, Income Summary showed a debit balance of $2,500. Which of the following statements is TRUE?

The following normal account balances were found on the general ledger before closing entries were prepared: Revenue \ 700 Cash \ 500 Expenses \ 400 Accounts Receivable \ 350 Capital \ 7,500 Withdrawals \ 1,000 After closing entries are posted, what is the balance in the Revenue account?

The Income Summary account shows debits of $20,000 and credits of $22,000. This is a result of

From the following accounts, prepare in proper form a post-closing trial balance for Blue Star Company on December 31, 2019. Accounts Receivable \ 2,200 Accounts Payable 2,000 Cash 1,000 Salaries Payable 1,200 Supplies 300 Prepaid Insurance 2,000 R. Blue, Capital 2,300

The entry to close Income Summary (net loss) to Capital was omitted. This error will cause

Closing entries are normally prepared after the post-closing trial balance is prepared.

Closing Entries are necessary before completing the Financial Statements.

J. Oros showed a net loss of $3,250. The entry to close the Income Summary account would include a

Which of the following accounting cycle steps comes after the others?

When closing Income Summary, the balance is transferred to the Capital account.

When closing the Income Summary account when there is a net income

When the expenses are closed,

Each individual expense account is debited when closing, and the total of all the expense accounts is transferred to Income Summary.

How do you close the expense accounts?

The entry to close Income Summary (net loss) was entered in reverse-Income Summary was debited and Capital was credited. This error will cause

Temporary accounts are those accounts with balances that are brought forward to the next accounting period.

All revenue, expenses, and withdrawals will have zero balances before closing.

In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed. N X 0. Advertising Expense ________ ________ 1. Prepaid Insurance ________ ________ 2. Service Fees ________ ________ 3. Depreciation Expense ________ ________ 4. Accumulated Depreciation ________ ________ 5. Salaries Payable ________ ________ 6. Prepaid Rent ________ ________ 7. Income Summary ________ ________ 8. Insurance Expense