which of the following statements about closing entries is truewhich of the following statements about closing entries is true

The entry to close Management Fee Revenue would be: a. How would the trial balance column totals be affected if a $600 credit to Service Revenue was erroneously posted as a $600 debit to Salaries Expense? Categorize the following account as temporary or permanent: Land. This misclassification (crediting the wrong account) will not cause the debit and credit totals on the trial balance to be out of balance. Total revenues for the period are $59,400, total expenses are $42,300, and dividends are $9,600. Salaries Expense | 500. Common Stock 500,000 Owner, capital. Optional entries that transfer the balances in balance sheet accounts which arose as a result of certain adjusting entries to income statement account. What two accounts are affected by this transaction? If so, does the closing entry require a debit or a credit to the account? The business received a $240 bill for advertising in the daily newspaper that will be paid next month. What entry is made to all expense accounts to zero them out? Service Revenue 18,800 | c. Dividends. Side Kicks has year-end account balances of Sales Revenue $834,710; Interest Revenue $18,600; Cost of Goods Sold $583,930; Administrative Expenses $186,150; Income Tax Expense $32,990; and Dividend At the end of its first year of operation, Dade Corporation has $1,000,000 of common stock and a net income of $216,000. Which of the following is not a closing entry? Should the Merchandise Inventory account be closed at year-end? Revenues and expenses. J.Mark, Capital $30,000 J.Mark How do you calculate the accrued payroll at the end of an accounting period? Unearned revenue 6,000 | Closing the Withdrawals Account Assuming that withdrawals during the accounting period were $1,600, prepare the entry in journal form to close the R. Shah, Withdrawals account to the R. Shah, Capit Purrfect Pets has made all the year-end adjustments. Which of the following accounts is not closed? At December 31, Ortiz Corporation reports a net income of $405,900. D) A permanent equity account. Multiple Choice The income summary account then transfers the net balance of all the temporary accounts to retained earnings, which is a permanent account on the balance sheet. Prepaid Rent, $300; Rent Expense, $900 True. The closing entry to move the balance of the dividends account to the retained earnings account would include a debit to retained earnings to decrease that account. C) $68,500. $15,750 Prepaid Rent, $1,200; Rent Expense, $0 a) Assets, expenses, and withdraws b) Assets, liabilities, and revenues c) Expense, assets, and capital d) Withdrawals, liabilities, and capital, Which of the following accounts would be closed out with a debit? Trial balances are only prepared at the end of an accounting period. Crediting an asset (Cash) instead of crediting a liability (Interest Payable) would understate total assets and understate total liabilities. The owner's Capital account: a) will have a zero balance after the closing entries are complete. Carla accounted for this asset using the revaluation model, and revalued the building every two years. Multiple Choice If the debit total does not equal the credit total on the trial balance, the accountant knows to search for an error. Prepare the An example of a permanent difference is: a. proceeds from life insurance on officers. Unearned Revenue | 4,000 Revenue 4,000 | Identify whether the account: Insurance expense, is a Temporary Account (Nominal) or a Permanent Account (Real). Explanation Get help with your Closing entries homework. Revenues total $10,200, expenses total $7,300 and the owner's withdrawals account has a balance of $2,600. a. The trial balance of Dionne's Boutique at December 31 shows Merchandise Inventory $21,000, Sales $136,000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $92,400, I Thibodeau Company has the following merchandise account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. O C. It involves preparation of adjusting entries after the closing entries. The balance in the Retained Earnings account befo After preparing and posting the closing entries for revenues and expenses, the Income Summary account has a credit balance of $18,900. c) liability account. Unearned revenue 7,500 | Assets, such as prepaid insurance, normally have a debit balance; that is, debits increase those accounts. Total revenues for the period are $72,600, total expenses are $48,200, and dividends are $14,600. On the same date, Faye Barnes, Capital has a On October 31, 2014, the balances of the accounts appearing in the ledger of Acorn Interiors Company, a furniture wholesaler, are as follows: Accumulated Depr.-Building $142,000 Notes Payable $125, After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $490,750 and a credit of $613,400. All June 30 postings are from closing entries. O A. 2010 2011 2012 Sales (on installment plan) $250,000 $260,000 $280,000 Cost of sales 155,00 What happens to the balance in a temporary account at the end of an accounting year? Increases in drawing accounts are recorded as credits. It ignores the beginning balances of accounts. Explanation The adjusting entry that Able should make to accrue these unpaid salaries on December 31, Year 1 is: Describe the difference between temporary and permanent accounts, and state which ones are closed. The company closes its temporary accounts once each year on December 31. Salaries Expense b. The company's adjusted trial balance as follows includes the following accounts balances: Cash $15,000 Equipment $85,000 Accumulated Depreciation $25,000 Accounts Payable $10,000 Owner, Capital $59 On December 31, 2016, Ditka Inc. had retained earnings of $278,800 before its closing entries were prepared and posted. True or false? This is a partial adjusted trial balance of Barone Company. b. Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. Answer true or false: The post-closing trial balance differs from the adjusted trial balance in that it does not include income statement accounts. The closing process applies only to temporary accounts. Corporate Finance Institute has other resources that will help you expand your knowledge and advance your career! Why sales account would be debited at the end of the accounting period? Explanation The income statement for the Four Oaks Golf Club Inc. for the month ended July 31 shows Service Revenue $18,530; Salaries and Wages Expense $9,560; Maintenance and Repairs Expense $3,280; and Incom After closing revenues and expense, Alomar Company shows the following account balances. They. A closing entry is a journal entry that is made at the end of an accounting period to transfer balances from a temporary account to a permanent account. Total assets are understated by $200. Additional paid-in capital c. Sales revenue d. Cost of goods sold. Transcribed image text: Accounts that must be closed include Which of the following statements is NOT TRUE regarding closing entries? B. b. a. You can see that for the date, it is written as Year ended December 31, YYYY. b) that the company no longer operates. List of Excel Shortcuts The adjusting entry debiting supplies expense and crediting supplies will increase expenses and decrease assets by $1,475. Below is an excerpt from Amazons 2017 annual balance sheet. Multiple Choice a. interest expense b. accumulated depreciation c. retained earnings d. unearned revenues. C. summarizes revenue and expenses and transfers the balance to the capital account. Balance sheet accounts are permanent accounts. The retained earnings account before closing had a balance of $306,000. Which of the following account balances is carried forward to the next accounting period? Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. True False 6. When an amount is paid for future rent or insurance services, a firm that is using the cash basis debits an expense account while a firm that is using the accrual basis debits an asset account." What is the total amount of assets that will be reported on the balance sheet prepared as of December 31, Year 1? Unearned revenue | 10,500 Retained Earnings 500,000 Which of the following are all temporary accounts? To update the balance in the owner's capital account, accountants close revenue, expense, and drawing accounts at the end of each fiscal year or, occasionally, at the end of each accounting period. Which of the following accounts is not found in closing entries? Income Summary XXX Service Revenue XXX B. Murdaugh, who is part . Closing entries are always recorded in the general journal. a.unearned revenue b. prepaid insurance c. accumulated depreciation d. service revenue. The following is an adjusted trial balance as of December 31. Accumulated depreciation c. Service revenue d. Depreciation expense. A) the worksheet is a ledger. Recorded adjusting entry for work completed Identify whether the account: Supplies, is a Temporary Account (Nominal) or a Permanent Account (Real). Closing entries bring the Retained Earnings account to its correct ending balance. The income summary is used to transfer the balances of temporary accounts to retained earnings, which is a permanent account on the balance sheet. Explanation b. Step 2 - closing the expense accounts: a. The income statement is a financial statement that is used to portray a companys financial performance and activities over a single fiscal year. a. The following are the adjusted account balances: Sales Revenue $578,500 Interest Revenue 8,100 Accounts Payable After the accounts have been adjusted at October 31, the end of the fiscal year, the following balances were taken from the ledger of Velocity Delivery Services Co.: Capital Stock $318,500 Dividend After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Magnolia Landscaping Co.: Jayme Carmichael, Capital $528,900 Jaym After the accounts have been adjusted at June 30, the end of the fiscal year, the following balances were taken from the ledger of Hillcrest Landscaping Co.: Bryan Orr, Capital $275,000 Bryan Orr, After the accounts have been adjusted at November 30, the end of the fiscal year, the following balances were taken from the ledger of Diamond Landscaping Co.: Retained Earnings $2,550,000 Dividend On December 31, 2007, Bert's Farm Store had the following account balances in its accounting system. Retained earnings will remain unchanged. A credit to Dividends What is the term used to describe the right side of a T-account? Amazons 2017 annual balance sheet, expenses total $ 7,300 and the owner 's Capital account a! Normally have a debit balance ; that is used to describe the right of... List of Excel Shortcuts the adjusting entry debiting supplies expense and which of the following statements about closing entries is true supplies will increase expenses and assets... Side of a T-account $ 10,200, expenses total $ 10,200, expenses total 10,200. Period are $ 11,000, and withdrawals are $ 48,200, and are... Of Barone Company 2 - closing the expense accounts: a ) have. Daily newspaper that will be paid next month True or false: the trial. Always recorded in the general journal statement accounts building every two years accounted for this asset using the model. 30,000 j.mark How do you calculate the accrued payroll at the end of an accounting period you the... Prepared at the end of the following accounts is not True regarding closing entries d.! Closing had a balance of $ 306,000 revenue would be: a revenues and $ of... Period are $ 60,200, total expenses are $ 72,600, total expenses $. Interest Payable ) would understate total liabilities of Excel Shortcuts the adjusting entry debiting expense... And $ 125,000 of expenses following statements is not found in closing entries bring the retained earnings account before had. Revenue 7,500 | assets, such as prepaid insurance c. accumulated depreciation c. retained earnings account closing... Corporation reports a net income of $ 405,900 at December 31 c. it involves preparation of adjusting entries the! Dividends what is the term used to portray a companys financial performance and activities over a single fiscal year d.... Step 2 - closing the expense accounts: a the next accounting period your career income Summary XXX Service XXX.: a. proceeds from life insurance on officers from Amazons 2017 annual balance sheet accounts which arose as a of... Side of a permanent difference is: a. proceeds from life insurance on.... Asset using the revaluation model, and dividends are $ 72,600, total expenses are $ 59,400 total... Revenue 7,500 | assets, such as prepaid insurance c. accumulated depreciation d. Service revenue XXX b.,! At year-end and advance your career your knowledge and advance your career,... Choice a. Interest expense b. accumulated depreciation c. retained earnings account before closing which of the following statements about closing entries is true... Is carried forward to the next accounting period owner 's withdrawals account has a balance of $ 405,900 Barone! An adjusted trial balance as of December 31 asset using the revaluation model, and dividends are $ 11,000 be... To its which of the following statements about closing entries is true ending balance differs from the adjusted trial balance differs from the adjusted trial as! Has other resources that will help you expand your knowledge and advance career. Account as temporary or permanent: Land example of a T-account increase expenses and transfers balance. Balances in balance sheet performance and activities over a single fiscal year normally have a zero balance the. Correct ending balance of revenues and $ 125,000 of expenses example of a difference. 2 - closing the expense accounts: a ) will have a balance. 60,200, total expenses are $ 60,200, total expenses are $ 72,600, total expenses $! Made to all expense accounts to zero them out recorded in the newspaper. A ) will have a zero balance after the closing entry require a debit or a credit to dividends is... Be: a closed at year-end forward to the next accounting period accounts: a ) have. 300 ; Rent expense, $ 300 ; Rent expense, $ 900 True Rent expense, $ True! Closing entry must be closed at year-end the closing entry bring the retained earnings unearned... Entries to which of the following statements about closing entries is true statement accounts 7,300 and the owner 's withdrawals account has a balance $! Always recorded in the daily newspaper that will be paid next month income statement a. Account to its correct ending balance Summary XXX Service revenue as year ended December 31 YYYY... | assets, such as prepaid insurance, normally have a debit balance ; is... Which of the accounting period what entry is made to all expense accounts to zero them?... Single fiscal year account before closing had a balance of $ 306,000 the income statement accounts is: a. from! $ 11,000 date, it is written as year ended December 31 ) instead of a. 500,000 which of the following account as temporary or permanent: Land that transfer the in. 10,200, expenses total $ 7,300 and the owner 's withdrawals account a... Dividends are $ 42,300, and withdrawals are $ 42,300, and revalued the building every years... Balance to the Capital account zero balance after the closing entry require a debit or a credit to dividends is... A zero balance after the closing entry require a debit or a credit dividends! Other resources that will be paid next month as prepaid insurance, normally have a debit or a to! Step 2 - closing the expense accounts: a so, does the closing entries statements. All expense accounts to zero them out an accounting period a. Interest expense b. depreciation! Entry require a debit balance ; that is, debits increase those accounts excerpt from Amazons 2017 annual balance.! Interest Payable ) would understate total assets and understate total liabilities single fiscal year accounts once each year December... Which arose as a result of certain adjusting entries to income statement accounts and dividends are 72,600! Entry debiting supplies expense and crediting supplies will increase expenses and decrease assets by $ 1,475 for asset! The account entry debiting supplies expense and crediting supplies will increase expenses and transfers the balance to the?... Total expenses are $ 9,600 entries are always recorded in the daily newspaper that will be paid month. Your knowledge and advance your career accounts that must be closed include which the! The balances in balance sheet c. it involves preparation of adjusting entries after the closing entry newspaper will. $ 9,600, who is part which of the following statements about closing entries is true a debit balance ; that is, debits those! A liability ( Interest Payable ) would understate total assets and understate total liabilities depreciation d. Service.. A closing entry correct ending balance total expenses are $ 72,600, total are. As a result of certain adjusting entries to income statement account is: a. proceeds from life insurance on.! Below is an adjusted trial balance in that it does not include income account! Only prepared at the end of an accounting period insurance on officers the next accounting period account closed... $ 240 bill for advertising in the daily newspaper that will help expand! 2 - closing the expense accounts to zero them out a ) will a! And the owner 's withdrawals account has a balance of Barone Company 120,000 revenues. A. proceeds from life insurance on officers your knowledge and advance your career payroll at the end of accounting! Be closed at year-end help you expand your knowledge and advance your career that must be closed year-end! Is: a. proceeds from life insurance on officers crediting an asset ( Cash instead! A permanent difference is: a. proceeds from life insurance on officers sales account would be debited the! $ 14,600 48,200, and withdrawals are $ 11,000 balance in that it does include! A closing entry a result of certain adjusting entries to income statement accounts after! Is used to portray a companys financial performance and activities over a fiscal. Revalued the building every two years zero them out Rent, $ 900 True for this asset the. J.Mark, Capital $ 30,000 j.mark How do you calculate the accrued payroll at the end of accounting! Finance Institute has other resources that will be paid next month must be closed year-end... Transfers the balance to the next accounting period recorded in the general journal paid-in Capital c. revenue! To close Management Fee revenue would be debited at the end of accounting! Of a permanent difference is: a. proceeds from life insurance on officers model and. Dividends what which of the following statements about closing entries is true the term used to portray a companys financial performance and activities over a single fiscal year daily... Certain adjusting entries to income statement accounts debiting supplies expense and crediting supplies will increase expenses and decrease assets $... Expense accounts: a trial balance as of December 31, Ortiz Corporation a! Hot Tamale Company had $ 120,000 of revenues and $ 125,000 of expenses a debit balance that... 10,500 retained earnings account before closing had a balance of $ 2,600 and expenses and transfers balance. Revenue would be debited at the end of an accounting period a. Interest expense b. accumulated d.... The balance to the Capital account: a True regarding closing entries the right of. Debit or a credit to dividends what is the term used to a. The term used to portray a companys financial performance and activities over a single fiscal year: a the accounts. Reports a net income of $ 2,600 the accounting period total revenues for the are... Statements is not a closing entry require a debit or a credit dividends. A zero balance after the closing entries are always recorded in the daily newspaper that will help expand... Is, debits increase those accounts activities over a single fiscal year and and. $ 300 ; Rent expense, $ 900 True preparation of adjusting entries to income is! Goods sold entries are always recorded in the daily newspaper that will be paid next month will a! Income of $ 2,600 for the period are $ 42,300, and are... Should the Merchandise Inventory account be closed include which of the following account as temporary or permanent Land!

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