CHAPTER 6

Question 1

At the end of each year, the balances of these temporary accounts are transferred to the capital account. Thus, the balances of the owner’s capital account represent the cumulative net result of income, expense, and withdrawal transactions. This phase of the cycle is called the

Answer 1

Closing Procedure

Question 2

A _______________ is said to be closed when an entry is made such that its balance becomes zero.

Answer 2

temporary account

Question 3

is used to close the income and expense accounts.

Answer 3

Income Summary

Question 4

________________ simply transfers the balance of one account to another account. In this case, the balances of the temporary accounts are transferred to the capital account.

Answer 4

Closing

Question 5

it is necessary to test the equality of the accounts by preparing a new trial balance. This final is called a

Answer 5

Post-closing trial balance

Question 5

it is necessary to test the equality of the accounts by preparing a new trial balance. This final is called a
-verifies that all the debits equal the credits in the trial balance.

Answer 5

Post-closing trial balance

Question 6

is a journal entry which is the exact opposite of a related adjusting entry made at the end of the period. It is basically a bookkeeping technique made to simplify the recording of regular transactions in the next accounting period.

Answer 6

reversing entry