Chap 6

Question 1

Closing entries

Answer 1

journal entries that transfer the results of operations (net income or net loss) to owner’s equity and reduce the revenue, expense, and drawing account balance to zero.

Question 2

Income Summary Account

Answer 2

a special owner’s equity account that is used only in the closing process to summarize the results of operations.

Question 3

Interpret

Answer 3

to understand and explain the meaning and importance of something (such as financial statements).

Question 4

Postclosing Trial Balance

Answer 4

a statement that is prepared to prove the quality of total debits and credits after the closing process is completed.