Exam 6: Financial Statements and the Closing Process

Match the terms with the definitions. -Accounts that do not accumulate information across accounting periods but are closed, such as the drawing account and all income statement accounts.

The total assets amount to $24,000 and the total liabilities amount to $18,000. The amount of the owner's equity is

Changes in owner's equity that result from investments or withdrawals of assets by the owner are included in the

To close a revenue account with a credit balance, credit the account for its balance and debit the income summary account.

The income statement includes changes in owner's equity resulting from investments or withdrawals of assets by the owner.

Adjustments at the end of the period are not formally entered in the journal or posted to the accounts.

Cash and other assets that will be converted into cash within one year or the normal operating cycle of the business, whichever is longer, are called

Match the terms with the definitions. -The process of giving zero balances to the temporary accounts so that they can accumulate information for the next accounting period.