Exam 4: Completing the Accounting Cycle and Classifying Accounts

Given the following accounts and their adjusted balances before closing entries are posted,what amount will be posted to Bessie Cool,Capital in the process of closing the Income Summary account? Assume all accounts have normal balances.

J.Flow,the proprietor of Flow Services,withdrew $8,700 from his business during 2015.These withdrawals will result in which of the following closing entries at the end of 2015?

The following are selected accounts and their balances after adjustments at May 31,2015,the end of Mark's Furniture Refinishing's fiscal year.

___________________ is an account used only in the closing process.

When closing entries are made:

The Income Summary account is used:

A classified balance sheet organizes assets and liabilities into important subgroups.

Revenue and expense accounts are permanent accounts and should not be closed at the end of the fiscal period.

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Accounts that appear in the balance sheet are often called permanent or nominal accounts.

Explain the purpose of reversing entries.

The first five steps in the accounting cycle include analyzing transactions,journalizing,posting,preparing an unadjusted trial balance,and recording adjusting entries.

To prepare the income statement all necessary numbers can be found in the income statement columns of the work sheet,including the net income or net loss.

The Income Summary account is:

The asset section of a classified balance sheet includes:

The Income Summary account is used to close all other temporary accounts at the end of an accounting period.

On a work sheet,adjusted balances of revenues and expenses are sorted to the Income Statement columns.

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Describe a classified balance sheet.

A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired insurance of $600.This adjusting entry results in: