Exam 5: Closing Entries and the Post-Closing Trial Balance Including Appendix

The adjusted balances for Tomas Co. are listed below. Cash, $20,000 Accounts Receivable, $2,500 Prepaid Insurance, $3,500 Equipment, $15,000 Accumulated Depreciation, $2,000 Accounts Payable, $4,000 J.Tomas, Capital, $30,000 J.Tomas, Drawing, $10,000 Income from Services, $35,000 Wages Expense, $12,000 Rent Expense, $8,000 After recording the closing entries, what would be the balance of the capital account?

If Income Summary has a credit balance after closing revenue and expense accounts, this indicates a net loss.

The balance of the Drawing account is closed to the Capital account.

Match the terms that follow with the correct definitions. -Process in which preparing the post-closing trial balance is the last step

The closing process causes the account balance of which account to be zeroed out?

Match the terms that follow with the correct definitions. -Software that is used via the Internet instead of from a local computer making it accessible from anywhere with an Internet connection.

The Income Summary account has an $8,000 credit balance prior to being closed to the owner's Capital account. The owner's Capital account had a $32,000 beginning balance and a $36,500 ending balance. Determine the amount of the owner's drawing during the current period.

If a business has a net loss for a fiscal period, the journal entry to close the Income Summary account is a debit to Income Summary and a credit to Capital.

Match the terms that follow with the correct definitions. -Another term for an income statement.

How would the company's books be affected if the company's accountant failed to make any closing entries?

Match the terms that follow with the correct definitions. -List of the final balances of the general ledger after end-of-year procedures

Match the terms that follow with the correct definitions. -Software that integrates accounting, human resources, manufacturing, project management, and customer relationship management into one system.

After the temporary accounts are closed, only the real accounts have balances.

List and explain at least two advantages and disadvantages of a computerized accounting system.

Munoz Co. prepays cash in October for insurance that covers only the month of November. Munoz Co. records the expense in October. Which method of accounting is Munoz Co. using?

Match the terms that follow with the correct definitions. -Financial statements prepared during the fiscal year for a period of less than twelve months

Which of the following are all permanent accounts?

Information for the closing entries is normally obtained from the Adjusted Trial Balance columns of a work sheet.

Match the terms that follow with the correct definitions. -Procedures that store company data files in a safe place, such as online or on a flash drive.

The Income Summary account would be reported on which financial statement?