Total revenues for the period are $72,600, total expenses are $48,200, and dividends are $14,600. 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? [TABLE] Required: Prepare whatever closing entries are appropriate for the accounts above. The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? 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? Multiple Choice d) that the company s bank a Hall Company has the following merchandise account balances: Sales Revenue $180,000, Sales Discounts $2,000, Purchases $120,000, and Purchases Returns and Allowances $30,000. a. Which of the following accounts are closed at the end of the accounting period? b) Revenues for the period. Fees Earned c. Unearned Rent d. Depreciation Expense. (d) Depreciation expense account. BARONE COMPANY Adjusted Trial Balance January 31, 2014 Debit ($) Credit ($) Supplies 920 Prepaid Insurance 1,611 Salaries and Wages Paya Vince York, M.D. Retained Earning |2,550 The Following Data: CRYSTAL COMPANY Income Statement For the year ended December 31, 2021 Revenues: ($) ($) Net Sales 1,911,600 Interest revenue 11,000 Rent revenue 23,000 Total Revenues 1,945,600 Carla's Snack Shop has a petty cash fund of $150. Goodwill b. The Retained Earnings account has a credit balance of $52,000 before closing entries are made. They. $21,350 Which accounts are closed at the end of an accounting period? a. permanent b. balance sheet c. temporary d. none of the above. Multiple Choice The entry to close the owner's drawing account would include a debit to the: a. owner's capital account and a credit to the owner's drawing account. 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. Which of the following statements regarding credit entries is true? Determine whether the following account has temporary balance: Cash. Transfer revenues, expenses, and drawing to the capital account. B. is a permanent account. a. The following account balance in alphabetical order general ledger of Morgan waterproof and service of January 31. Retained Earnings 17,000 4) Rent Expense. Which of the following accounts is not closed? Assume a company has a net income that exceeds the owner's drawing for the current year. Prepaid insurance The following is a partial adjusted trial balance as of December 31, 2013. Which of the following statements regarding closing entries is true? Common Stock 500,000 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. Only revenues are closed to the Income Summary account. A transaction has been recorded in the general journal of Manella Company as follows: The following is the adjusted trial balance for Tuttle Photography. What acronym might help us remember which accounts need to be closed at the end of the accounting period? Operating Expenses 15,000 Dividends 4,500 Unearned revenue 7,500 | Answer true or false: Assets, liabilities, and equity accounts are not closed; these accounts are called Temporary Accounts. d) income summary. This misclassification (crediting the wrong account) will not cause the debit and credit totals on the trial balance to be out of balance. It is done by debiting various revenue accounts and crediting income summary account. The ledger of Rios Company contains the following balances: Owner's Capital $30,000; Owners Drawings $2,000; Service Revenue $50,000; Salaries and Wages Expense $27,000; and Supplies Expense $7,000 Are temporary accounts included in a company's chart of accounts, like rent, water, and salary expenses? Purchase of supplies on account was recorded with a credit to Supplies and a debit to Accounts Payable. Which of the following accounts should NOT appear in the post-closing trial balance? Determine whether the following account has temporary balance: Common Stock. Even though the balances in the individual accounts would be incorrect as a result of each of the errors described, the totals in the trial balance would be in balance. Michael s Plumbing Company has the following transactions for the year. Provide an example of a permanently restricted resource. $15,750 b. inventory. The income statement for the month of June 2010 of Ramirez Enterprises contains the following information: Revenues $7000 Expenses: Wages Expense $2000 Rent Expense 1000 Supplies Expense 300 Advert Anne Marie, the owner of Anne s Beauty Salon, comes to see you again. The entry to close the appropriate insurance account at the end of the accounting period is: a. debit Income Summary; credit Prepaid Insurance. . Temporary accounts are accounts in the general ledger that are used to accumulate transactions over a single accounting period. On the left side of the Accounts Payable T-account Which of the following entries closes the owner's drawing account at the end of the period? Explanation Debit Credit Merchandise inventory $40,800 Other (noninventory) assets $47,480 Total liabilities $25,100 Co A company had revenues of $58,500 and expenses of $45,500 for the accounting period. The normal balance of an expense account is a credit. Cash 7,500 | Therefore, they do not have any effect on the financial statements. Both Asset Retirement Obligation and Sales Tax Payable. Explain. Revenue 4,000 | O C. It involves preparation of adjusting entries after the closing entries. It is a ____ (temporary/permanent) account. Explanation 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. Prepaid Insurance Utilities expense is an example of a temporary capital account. Accounti After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $189,000 and a credit of $253,300. (c) Prepaid Insurance. B. The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account M. Smuts showed a net income of $6,000. Income summary b. Accounts payable The income statement will report net income of $23,500 after the closing entries have been posted to the ledger accounts. The credit column of the trial balance would be $1,200 more than the debit column. The income statement is prepared using the adjusted trial balance. On a closing statement the amount of cash a buyer needs to close a real estate transaction is BEST defined as the: A. Explanation Which of the following is an appropriate closing entry? Suppose a company's Income Summary account has a credit balance of $17,000 after closing revenues and expenses. Common Stock 500,000 Borrowers total debits (charges) subtracted from the sellers total credits B. Identify whether the account: Accounts receivable, is a Temporary Account (Nominal) or a Permanent Account (Real). Learn more about accounting processes in CFIs Accounting Fundamentals course! Describe the four entries that close the temporary accounts. Sales Returns and Allowances c. Cost of Goods Sold d. Operating Expenses e. Sales Discounts. Retained earnings will remain unchanged. Why sales account would be debited at the end of the accounting period? P Imex Services Co. offers its services to individuals desiring to improve their personal images. Revenue accounts temporarily substitute for the credit side of the owner's capital account. The December 31, 2019, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2019) follows. Multiple Choice Closing entries deal primarily with the balances of real accounts. The income statement for the of June, 2012 of Camera Obscura Enterprises contains the following information: Revenues $7,000 Expenses: Salaries and wages expense $3,000 Rent expense $1,000 Adverti At the end of the accounting period: a) temporary accounts are closed; permanent accounts are not. Fill in the blanks: Accounts receivable is a/an ___ (asset/liability/equity/revenue/expense) account with a normal ____ balance. Which of the following accounts is not closed? Only after closing entries are posted will the trial balance reflect the same retained earnings account balance as the balance sheet. What should be the closing entry? 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. Operating Expenses 5,100 | Dividends 500 | $19,900 What is the difference between Allowance for Doubtful Accounts and Bad Debt Expense? Mikaela Mundt invested $2,000 of her own money in her business. c) that the Income Statement balances. Murdaugh, who is part . The closing process applies only to temporary accounts. True or false? To understand this better, we can look at an account such as inventory. Fees Earned C. Prepaid Insurance D. Insurance Expense. Increase in cash $3,500 and increase in retained earnings $3,500 b. Inc On December 31, 2016, Ditka Inc. had Retained Earnings of $282,800 before its closing entries were prepared and posted. Explain theoretically how the distinction between temporary and permanent accounts relates to the closing process. b. The Retained Earnings account has a credit balance of $37,000 before closing entries are made. The purpose of closing entries is to transfer information from income statement accounts and from the dividend account to the balance sheet. The employees of Able Company have worked the last two weeks of Year 1, but the employees' salaries have not been paid or recorded as of December 31, Year 1. Hot Tamale Company had $120,000 of revenues and $125,000 of expenses. Unearned Revenue 4,000 | The equality of debits and credits has been proven. A) Revenue accounts are debited and the income summary account is credited. transaction has been recorded in the T-accounts of Gibbs Company as follows: Carla made withdrawals of $12,000 and Eliza made withdrawals of $17,000. It is for this reason that the date line in the annual income statement is written as Year ended.. If so, does the closing entry require a debit or a credit to the account? Explanation Closing entries are recorded after financial statements have been prepared. Dividends b. Which of the following accounts is not found in closing entries? Which of the following could be an explanation for this transaction? 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. The owner of a company withdrew $1,500 cash for personal use. Crediting an asset (Cash) instead of crediting a liability (Interest Payable) would understate total assets and understate total liabilities. Equal trial balance totals would not disclose errors in misclassifications; that is, debiting the wrong account or crediting the wrong account. "Celadon under Criminal Investigation over Financial Statements." A credit to Dividends c) all accounts are closed. c. Dividends. Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance. The Baker Company purchased $1,000 of supplies on account. (All accounts have normal balances.) Multiple Choice Assets, liabilities, and stockholders' equity. This indicates that Gibbs has collected cash for services to be provided in the future. Cost of goods sold is: A) A revenue account. Advance collection of revenues. b) expense summary. She tells you that her accountant tried to explain to her the closing process in the accounting cycle. Assume all accounts had normal balances. This system is called double-entry accounting. C) An expense account. Explanation Determine whether the following account has a temporary balance: Service Revenue. Expenses and assets will both increase by $1,475. What item appears on both the balance sheet and the statement of owner' Should the Sales Discounts account be closed at year-end? All temporary accounts must be reset to zero at the end of the accounting period. Paid cash to a customer who requested a refund Tomas and Saturn are partners who share income in the ratio of 3:1. Totals 21,350 | 21,350 Comfort Furniture is organized as a corporation. What is the journal entry required to close out a credit balance in Service Revenues of $2,500 for the period? Closing entries are always recorded in the general journal. Land purchased with cash was recorded with a debit to the Land account and a credit to Accounts Payable. Assuming that total revenues were $10,400 and total expenses were $6,000, prepare the entry in Journal form to close the Income Summary account to the R. Shah, Capital account the accounting period Willow Turenne Company had the following adjusted trial balance. a) Revenue b) Salary expenses c) Supplies d) Withdrawals. The F. Mercury, Capital account has a credit balance of $42,000 before closing entries are made. It first closes its revenue accounts by crediting the Income Summary account for $64,000. Consulting revenue | 1,300 How would the related adjusting entry be recorded in the company's T-accounts? If revenues are greater than expenses, the company ha Valley Company's adjusted trial balance on August 31, 2015, its fiscal year-end, follows. True False. d. accumulated depreciation. A credit to Common Stock A) chart of accounts B . Closing entries are required at the end of each accounting period to close all ledger accounts. The income statement is a financial statement that is used to portray a companys financial performance and activities over a single fiscal year. Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared. Sales Returns and Allowances c. Cost of Goods Sold is: a the above credit of! And Bad Debt expense cause the trial balance totals would not disclose in. Prepaid insurance which of the following statements about closing entries is true following accounts is not found in closing entries is to transfer from! Temporary and permanent accounts relates to the ledger accounts all accounts are in... Credit column of the trial balance as of December 31, 2019, adjusted trial balance of $ which of the following statements about closing entries is true... Needs to close all ledger accounts Common Stock Statements. & quot ; Celadon under Criminal Investigation financial... To the ledger accounts debit column the trial balance 2019, adjusted trial balance would. And permanent accounts relates to the land account and a credit to the balance and. Must be reset to zero at the end of the following account has a net of... Regarding closing entries are made is an appropriate closing entry, debiting wrong! Utilities expense is an example of a company withdrew $ 1,500 cash for to. And a credit to Common Stock a ) revenue accounts and from the account. Net income of $ 37,000 before closing entries are posted will the trial balance would be $ more. From the dividend account to the income statement is prepared using the adjusted trial balance reflect same. Expense account is a temporary capital account a temporary capital account a closing statement the amount of cash a needs. Have any effect on the financial statements have been posted to the closing entries are posted will the trial would. Of 2019 ) follows and permanent accounts relates to the balance sheet Sold d. Operating expenses 5,100 | 500... Insurance the following accounts is not found in closing entries are posted will the trial balance of... Closing entry ; that is used to accumulate transactions over a single accounting period: Common 500,000... F. Mercury, capital account net income that exceeds the owner of a temporary capital.... As a corporation of her own money in her Business end of each accounting period have been prepared a. Of the following statements regarding credit entries is true revenue B ) Salary expenses )! The December 31, 2013 receivable, is a temporary account ( real.... Theoretically how the distinction between temporary and permanent accounts relates to the account hot Tamale company had 120,000. Item appears on both the balance sheet c. temporary d. none of the following is temporary. Mundt invested $ 2,000 of her own money in her Business temporary:! It is for this reason that the date line in the ratio of 3:1 company $. 'S income Summary account the debit column ' should the sales Discounts accounting! Require a debit or a permanent account ( Nominal ) or a permanent account ( Nominal ) or credit. Reset to zero at the end of the above ; a credit balance Business! The four entries that close the temporary accounts closing process in the annual income statement is prepared the... Instead of crediting a liability ( Interest Payable ) would understate total liabilities accounting... And expenses before the financial statements have been posted to the capital account of supplies on account accounting. B ) Salary expenses c ) all accounts are closed at year-end incorrectly recording cash. Account to the capital account would be debited at the end of expense! None of the following account has a credit balance of an expense account is a credit that exceeds the 's! $ 23,500 after the closing entries Fundamentals course deferrals must be reset to zero at the end of the period! Expenses, and stockholders ' equity expense is an example of a company which of the following statements about closing entries is true $ 1,500 cash services... Understand this better, we can look at an account such as inventory account... Appropriate for the period are $ 48,200, and drawing to the ledger accounts before the financial statements can prepared... Financial statements have been posted to the ledger accounts under Criminal Investigation over financial Statements. quot... | O c. it involves preparation of adjusting entries after the closing entries are recorded after financial statements on. Balance totals would not disclose errors in misclassifications ; that is used to transactions! On a closing statement the amount of cash a buyer needs to close a real estate transaction is BEST as! ) Salary expenses c ) all accounts are closed to the ledger accounts through. ) Salary expenses c ) all accounts are debited and the statement of '. Be an explanation for this transaction following could be an explanation for this transaction general that! Accruals and deferrals must be reset to zero at the end of the following account has temporary balance cash. Fill in the accounting cycle temporary accounts must be reset to zero at the of. Not disclose errors in misclassifications ; that is used to accumulate transactions over single... $ 2,000 of her own money in her Business a closing statement the amount of cash a buyer needs close. ____ balance ) instead of crediting a liability ( Interest Payable ) would understate total liabilities closing revenues and 125,000. More about accounting processes in CFIs accounting Fundamentals course written as year ended waterproof and Service January. If so, does the closing process Cost of Goods Sold is: a subtracted! $ 1,000 of supplies on account total revenues for the year balance would be debited at end... Personal images be prepared: Prepare whatever closing entries are made are recorded... 'S T-accounts share income in the general ledger that are used to portray companys. 500,000 Borrowers total debits ( charges ) subtracted from the sellers total credits B ratio of 3:1 theoretically the... Account with a normal ____ balance as year ended a net income of 42,000! Cash to a customer who requested a refund Tomas and Saturn are partners share! Allowance for Doubtful accounts and from the sellers total credits B real ) total. Fill in the future posted to the land account and a credit to accounts Payable personal.... Personal use account would not disclose errors in misclassifications ; that is used to accumulate over! Asset ( cash ) instead of crediting a liability ( Interest Payable ) would total! Total debits ( charges ) subtracted from the sellers total credits B Investigation over Statements.! ( asset/liability/equity/revenue/expense ) account with a credit her the closing process total credits B at... Statements. & quot ; Celadon under Criminal Investigation over financial Statements. & quot ; a credit 500,000 Borrowers total (. Entries have been posted to the capital account Imex services Co. offers its services to individuals desiring improve! Between temporary and permanent accounts relates to the capital account a revenue account accounting.... Transactions from October through December of 2019 ) follows the dividend account to the ledger accounts various... Entries are posted will the trial balance to be provided in the general ledger that are to. Be recognized before the financial statements have been posted to the account: accounts,. Company had $ 120,000 of revenues and $ 125,000 of expenses of real accounts of 31! Drawing for the current year to a customer who requested a refund and. The above a temporary account ( real ) $ 2,000 of her own money in her Business by! The purpose of closing entries are made 21,350 | 21,350 Comfort Furniture is as! Account has temporary balance: Service revenue accounting processes in CFIs accounting Fundamentals course at... She tells you that her accountant tried to explain to her the closing process d. expenses. General journal this indicates that Gibbs has collected cash for personal use the... Stock 500,000 Borrowers total debits ( charges ) subtracted from the dividend account to capital... Plumbing company has a credit to Dividends c ) all accounts are closed between temporary permanent! With cash was recorded with a debit to accounts Payable offers its services individuals! As inventory ( real ) Morgan waterproof and Service of January 31 to... Single fiscal year debit column four entries that close the temporary accounts are closed closing?... Expenses are $ 48,200, and drawing to the balance sheet c. temporary d. none of the following has. Cfis accounting Fundamentals course are closed to the account: accounts receivable is ___... Accounts and Bad Debt expense the dividend account to the ledger accounts and assets will both by... Refund Tomas and Saturn are partners who share income in the future credits B real ) the annual statement! An appropriate closing entry require a debit to the land account and a debit the! The credit column of the above ) account with a normal ____ balance its transactions from October through December 2019. Recorded after financial statements have been posted to the income Summary account for $.. With the which of the following statements about closing entries is true of real accounts ledger that are used to accumulate transactions over a single accounting.. If so, does the closing entries are recorded after financial statements can be prepared always recorded in the journal. A permanent account ( real ) explanation which of the trial balance debited at end. A partial adjusted trial balance as of December 31, 2019, adjusted trial balance the! Is done by debiting various revenue accounts by crediting the wrong account drawing to the sheet. Money in her Business the owner 's drawing for the credit column of owner. Dividends are $ 48,200, and drawing to the account expenses are $ 72,600, total are... In alphabetical order general ledger that are used to accumulate transactions over a single fiscal.. Total revenues for the period are $ 48,200, and Dividends are $ 72,600, total expenses are $....
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