Deck 6: Closing Entries and Teh Postclosing Trial Balance

Question 1

The entry to close an expense account requires a credit to the Income Summary account.

Answer 1

False

Question 2

One purpose of closing entries is to zero out the balances in the:

A)liability and capital accounts.
B)expense and capital accounts.
C)asset and liability accounts.
D)revenue and expense accounts.

Answer 2

D

Question 3

"Income and Expense Summary" is another name for the Income Summary account.

Answer 3

True

Question 4

Use the following account balances from the adjusted trial balance of ABC Consulting:

Select the correct closing entry that ABC Consulting would make to close the income summary account at the end of the accounting period.

A)debit B. Conway, Capital $600 credit B. Conway, Drawing for $600.
B)debit B. Conway, Capital $9,700 and credit Income Summary for $9,700.
C)debit B. Conway, Capital $18,000 and credit Income Summary for $18,000.
D)debit Income Summary $9,700 and credit B. Conway, Capital for $9,700.

Question 5

The temporary owner's equity accounts are closed because they apply to only one accounting period.

Question 6

The heading "Closing Entries" is usually written in the Description column of the general journal above the first closing entry.

Question 7

Use the following account balances from the adjusted trial balance of ABC Consulting:

Select the correct closing entry that ABC Consulting would make to close their expense account(s)at the end of the accounting period.

A)debit Salary Expense $2,600; debit Rent Expense $3,000; debit Supplies Expense $1,900; debit Advertising Expense $800 and credit Income Summary $8,300.
B)debit Income Summary $8,300 and credit B. Conway, Capital for $8,300.
C)debit B. Conway, Capital $8,300 and credit Salary Expense $2,600; credit Rent Expense
$3,000; credit Supplies Expense $1,900; Advertising Expense $800.
D)debit Income Summary $8,300 and credit Salary Expense $2,600; credit Rent Expense $3,000; credit Supplies Expense $1,900; Advertising Expense $800.

Question 8

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

Question 9

The entry to transfer net income to the owner's capital account would include a debit to the owner's capital account.

Question 10

After the closing entries are posted, the balance of the owner's capital account agrees with the amount of owner's equity shown on the balance sheet for the period.

Question 11

The postclosing trial balance lists only the ________ accounts.

Question 12

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

Question 13

What is the amount that ABC Consulting would report as the ending balance in the B. Conway, Capital account at the end of the year?

A)$22,100.
B)$3,900
C)$13,000.
D)$31,000.

Question 14

One of the purposes of closing entries is to transfer net income or net loss for the period to the owner's capital account.

Question 15

"Closing" is written in the Description column of the individual revenue and expense accounts in the general ledger.

Question 16

A compound entry in the general journal is made to close expense accounts.

Question 17

Use the following account balances from the adjusted trial balance of ABC Consulting:

Select the correct closing entry that ABC Consulting would make to close their revenue account(s)at the end of the accounting period.

A)debit Income Summary and credit Fees Revenue for $18,000.
B)debit Fees Revenue and credit Cash for $18,000.
C)debit Fees Revenue and credit B. Conway, Capital for $18,000.
D)debit Fees Revenue and credit Income Summary for $18,000.

Question 18

Select the correct closing entry that ABC Consulting would make to close the owner's drawing account at the end of the accounting period.

A)debit B. Conway, Drawing $600 credit B. Conway, Capital for $600.
B)debit B. Conway, Capital $600 and credit B. Conway, Drawing for $600.
C)debit B. Conway, Drawing $600 and credit Income Summary for $600.
D)debit Income Summary $600 and credit B. Conway, Drawing for $600.

Question 19

The postclosing trial balance contains balance sheet accounts only.

Question 20

The owner's capital account is closed at the end of each accounting period.

Question 21

The entry to close the Depreciation Expense account may include a debit to:

A)the Depreciation Expense account and a credit to the Accumulated Depreciation account.
B)the Accumulated Depreciation account and a credit to the Income Summary account.
C)the Depreciation Expense account and a credit to the Income Summary account.
D)the Income Summary account and a credit to the Depreciation Expense account.

Question 22

Entries required to zero the balances of the temporary accounts at the end of the year are called:

A)adjusting entries.
B)correcting entries.
C)closing entries.
D)posting entries.

Question 23

Which of the following accounts would be closed at the end of the year?

A)Joan Wilson, Capital
B)Accounts Receivable
C)Accumulated Depreciation
D)Supplies Expense

Question 24

Which of the following accounts will not normally have a zero balance after the closing entries have been posted?

A)Fees Income
B)Rent Expense
C)Capital
D)Income Summary

Question 25

The entry to transfer a net loss to the owner's capital account would include:

A)a debit to the Capital account and a credit to Income Summary.
B)a debit to Income Summary and a credit to Capital.
C)a debit to the Capital account and a credit to Cash.
D)a debit to the Capital account and a credit to the Drawing account.

Question 26

After the closing entries are posted to the ledger, each expense account will have:

A)a zero balance.
B)a negative balance.
C)a debit balance.
D)a credit balance.

Question 27

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 their revenue account(s)at the end of the accounting period.

A)
Fees Revenue $ 10,000
Income Summary $ 10,000
B)
R. Gees, Capital $ 10,000
Fees Revenue $ 10,000
C)
Income Summary $ 10,000
Fees Revenue $ 10,000
D)
Fees Revenue $ 10,000
R.Gees, Capital $ 10,000

Question 28

If a business has a net loss for a fiscal period, the journal entry to close the Income Summary account is:

A)a debit to Capital and a credit to Drawing.
B)a debit to Income Summary and a credit to Fees Income.
C)a debit to Income Summary and a credit to Capital.
D)a debit to Capital and a credit to Income Summary.

Question 29

Use the following account balances from the adjusted trial balance of Gees Catering:

What is the amount that Gees Consulting would report as the ending balance in the R. Gees, Capital account at the end of the year?

A)$18,000
B)$28,000
C)$ 8,000
D)$26,000

Question 30

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 their Income Summary
Account at the end of the accounting period.

A)
R) Gees, Capital $ 19,000
Income Summary $ 19,000
B)
Income Summary $ 9,000
R) Gees, Capital $ 9,000
C)
R) Gees, Capital $ 9,000
Income Summary $ 9,000
D)
Income Summary $ 11,000
R) Gees, Capital $ 11,000

Question 31

Which of the following accounts is not closed?

A)Rent Expense
B)Joan Wilson, Drawing
C)Fees Income
D)Cash

Question 32

The owner's drawing account is closed by:

A)debiting the owner's capital account and crediting the owner's drawing account.
B)debiting the owner's drawing account and crediting the owner's capital account.
C)debiting Income Summary and crediting the owner's drawing account.
D)debiting the owner's drawing account and crediting Income Summary.

Question 33

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.

A)
R. Gees, Capital $ 1,000
R. Gees, Drawing $ 1,000
B)
Income Summary $ 1,000
R. Gees, Drawing $ 1,000
C)
R. Gees, Drawing $ 1,000
R.Gees, Capital $ 1,000
D)
R. Gees, Drawing $ 1,000
Income Summary $ 1,000

Question 34

The entry to close the Income Summary account may include:

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

Question 35

One purpose of closing entries is to:

A)reduce the owner's capital account balance to zero so that the account is ready for the next period.
B)transfer the results of operations to owner's equity.
C)adjust the ledger account balances to provide complete and accurate figures for use on financial statements.
D)close all accounts so that the ledger is ready for the next accounting period.

Question 36

Which of the following statements is not correct?

A)The owner's drawing account is closed to the Income Summary account.
B)Before the Income Summary account is closed, its balance represents the net income or net loss for the accounting period.
C)The Income Summary account is used only at the end of an accounting period to help with the closing procedure.
D)The Income Summary account is a temporary owner's equity account.

Question 37

The entry to close the Depreciation Expense account would include a debit to:

A)the Income Summary and a credit to Cash.
B)the Income Summary account and a credit to the Depreciation Expense account.
C)the Cash account and a credit to the Income Summary account.
D)the Depreciation Expense account and a credit to the Income Summary account.

Question 38

The revenue account Fees Income is closed by:

A)debiting Income Summary and crediting Fees Income.
B)debiting the owner's capital account and crediting Fees Income.
C)debiting Cash and crediting Fees Income.
D)debiting Fees Income and crediting Income Summary.

Question 39

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.

Question 40

Which of the following entries records the closing of Penny Pincher, Drawing at the end of the accounting period?

A)Debit Penny Pincher, Drawing; credit Penny Pincher, Capital
B)Debit Penny Pincher, Capital; credit Income Summary
C)Debit Penny Pincher, Capital; credit Penny Pincher, Drawing
D)Debit Income Summary; credit Penny Pincher, Drawing

Question 41

Which of the following accounts is a permanent account?

A)Supplies
B)Owner's drawing
C)Supplies Expense
D)Fees Income

Question 42

During the closing process, Accumulated Depreciation, Equipment will:

A)be closed to the income summary account.
B)not be closed.
C)be closed to the drawing account.
D)be closed to the capital account.

Question 43

After the closing entries are posted to the ledger, each revenue account will have:

A)either a debit or a credit balance.
B)a credit balance.
C)a debit balance.
D)a zero balance.

Question 44

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

A)Accumulated Depreciation-Equipment.
B)Accounts Payable.
C)Equipment.
D)Depreciation Expense-Equipment.

Question 45

Which of the following accounts has a normal credit balance?

A)T) Stark, Drawing
B)Accounts Payable
C)Supplies Expense
D)Accounts Receivable

Question 46

Identify the accounts below that are ALL classified as temporary accounts.

A)Wages Expense, Accumulated Depreciation, Fees Income
B)Owner's Drawing, Owner's Capital, Income Summary
C)Owner's Drawing, Depreciation Expense, Income Summary
D)Accounts Receivable, Depreciation Expense, Fees Income

Question 47

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

A)2
B)5
C)3
D)4

Question 48

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

A)Capital
B)Depreciation Expense
C)Accounts Payable
D)Land

Question 49

Which of the following statements is not correct?

A)The audit trail should be used to trace data through the accounting records to find and correct errors.
B)The balance of the owner's capital account on the adjusted trial balance will usually be different than that reported on the post-closing trial balance.
C)The balance of the owner's capital account, as reflected on the post-closing trial balance, will match the amount reported on the income statement.
D)If the post-closing trial balance does not balance, there are errors in the accounting records.

Question 50

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:

A)debit Income Summary $41,000; credit Expenses $41,000
B)debit Capital $6,000; credit Income Summary $6,000
C)debit Income Summary $6,000; credit Drawing $6,000
D)debit Income Summary $47,000; credit Capital $47,000

Question 51

Which of the following accounts has a normal debit balance?

A)T) Stark, Capital
B)Accounts Payable
C)Fees Income
D)Accounts Receivable

Question 52

Which of the following statements is not correct?

A)After closing entries are posted, the revenue, expense, and drawing accounts will have zero balances.
B)A post-closing trial balance will not contain revenue and expense account balances.
C)Adjusting entries must be journalized and posted before the closing entries are journalized and posted.
D)At the end of each accounting period, asset and liability account balances are reduced to zero.

Question 53

A post-closing trial balance could include all of the following accounts except the:

A)Accounts Receivable account.
B)Fees Income account.
C)owner's capital account.
D)Cash account.

Question 54

The first step in the closing process is to close:

A)the capital account.
B)the expense account(s).
C)the drawing account.
D)the revenue account(s).

Question 55

Which of the following accounts would not be involved in any of the closing entries?

A)Fred Sanford, Drawing
B)Advertising Expense
C)Accounts Payable
D)Income from Services

Question 56

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

A)post-closing trial balance.
B)balance sheet.
C)worksheet.
D)income statement.

Question 57

The first two closing entries to the Income Summary account indicate a debit of $53,000 and a credit of $64,000. The third closing entry would be:

A)debit Capital $11,000; credit Income Summary $11,000.
B)debit Revenue $64,000; credit Expenses $53,000.
C)debit Income Summary $11,000; credit Drawing $11,000.
D)debit Income Summary $11,000; credit Capital $11,000.

Question 58

Identify the accounts below that are ALL permanent accounts.

A)Accounts Receivable, Depreciation Expense, Fees Income
B)Accounts Receivable, Accumulated Depreciation, Accounts Payable
C)Accounts Payable, Owner's Capital, Income Summary
D)Accounts Payable, Wages Expense, Income Summary

Question 59

Which of the following statements is correct?

A)Preparation of the post-closing trial balance is the last step in the end-of-period routine.
B)Closing entries are entered directly on the worksheet.
C)The balance of the owner's drawing account will appear on the post-closing trial balance.
D)The Balance Sheet section of the worksheet contains the data that is used to make closing entries.

Question 60

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

A)Has the business achieved its net income goal for the year?
B)Has there been a lot of employee turnover?
C)How much do customers owe the business?
D)What are the business' current and long term plans for expansion?

Question 61

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

Question 62

Identify the item below that is NOT one of the steps in an accounting cycle.

A)journalize and post the adjusting entries.
B)prepare invoices for customers.
C)prepare the financial statements.
D)prepare the post-closing trial balance.

Question 63

After all the closing entries are posted, the ________ account reflects the results of operations for the period.

Question 64

The firm had net income if the entry to close the Income Summary account is recorded as a
________ to the owner's capital account.

Question 65

The trial balance is prepared to make sure that the general ledger is in balance after adjusting and closing entries have been recorded and posted.

Question 66

The balance of the Income Summary account is transferred to the ________ account.

Question 67

Data for the first two closing entries is taken from the___________ section of the worksheet.

Question 68

In the closing procedure, the total of the ________ account balances are transferred to the debit side of the Income Summary account.

Question 69

After the worksheet has been completed, the next step in the accounting cycle is to:

A)prepare the financial statements.
B)journalize the closing entries.
C)prepare the post-closing trial balance.
D)post the closing entries.

Question 70

At the end of the accounting period, the balances of the revenue and expense accounts are transferred to the ________ account.

Question 71

The ________ entries reduce the balances of the revenue, expense, and drawing accounts to zero so they are ready to record data for the next period.

Question 72

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.

Question 73

After the transactions have been posted, the next step in the accounting cycle is to:

A)prepare the post-closing trial balance.
B)prepare the worksheet.
C)journalize and post the adjusting entries.
D)prepare the financial statements.

Question 74

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

Question 75

Trial balances are prepared in a certain order. Given the choices below, which one depicts the trial balances in the correct order in which they would be prepared?

A)trial balance, post-closing trial balance, adjusted trial balance.
B)post-closing trial balance, adjusted trial balance, trial balance.
C)trial balance, adjusted trial balance, post-closing trial balance.
D)adjusted trial balance, trial balance, post-closing trial balance.

Question 76

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

Question 77

Listed below in random order are the steps in the accounting cycle.
1()prepare the financial statements
2()post the journal entries to the ledger
3()record journal entries
4()prepare a trial balance
What is the proper order of these steps?

A)(2), (3), (4), (1)
B)(3), (2), (1), (4)
C)(3), (2), (4), (1)
D)(4), (3), (2), (1)

Question 78

The postclosing trial balance lists only the ________, and accounts.

Question 79

The Ending Capital balance would appear on all of the following except the:

A)income statement.
B)post-closing trial balance.
C)balance sheet.
D)statement of owner's equity.

Question 80

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