Chapter 6 Flashcards
The entry to transfer net income to the owner’s capital account would include a debit to which account?
Income Summary
After the closing entries are posted to the ledger, each expense account will have:
a zero balance
Data for the first two closing entries is taken from which section of the worksheet?
the income statement
After the closing entries are posted to the ledger, each revenue account will have:
a zero balance
The entry to close the Income Summary account may include:
a debit to Income Summary and a credit to the owner’s capital account.
The Income Summary account is classified as what type of account?
owner’s equity account
Select the correct closing entry that Black Consulting would make to close their revenue account(s) at the end of the accounting period.
debit Fees Revenue and credit Income Summary for $18,000
Assuming that all accounts of Automobile Advertisers have normal balances at year-end, which of the following accounts could be both debited and credited during the four-step closing process?
Y. Lucas, Capital
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) At the end of each accounting period, asset and liability account balances are reduced to zero.
c) A post-closing trial balance will not contain revenue and expense account balances.
d) Adjusting entries must be journalized and posted before the closing entries are journalized and posted.
b) At the end of each accounting period, asset and liability account balances are reduced to zero.
Which of the following accounts of Backyard Wholesalers will have the same balance at the beginning of next year as it does presently on the adjusted trial balance?
a) Accounts payable
b) W. Mitchell, Capital
c) W. Mitchell, Drawing
d) Fees income
a) Accounts payable
Which of the following would be the fourth entry in the closing process for Backyard Wholesalers?
a) capital / drawing
b) drawing / capital
c) income summary / fees revenue
d) fees revenue / income summary
a) capital / drawing
Which of the following would be the first entry in the closing process for Backyard Wholesalers?
a) income summary / fees revenue
b) fees revenue / income summary
c) capital / drawing
d) drawing / capital
b) fees revenue / income summary
Which of the following would be the third entry in the closing process for Backyard Wholesalers?
a) income summary / capital
b) capital / income summary
c) income summary / expense accounts
d) expense accounts / income summary
a) income summary / capital
Debit Balance Credit Balance
Cash 10,000
Accounts Payable 2,000
R. Gees, Capital 18,000
R. Gees, Drawing 1,000
Fees Revenue 10,000
Salary Expense 7,000
Rent Expense 6,000
Supplies Expense 6,000
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?
$8,000
$18,000 beginning balance − $9,000 net loss − $1000 withdrawal = $8,000 ending balance.
The Ending Capital balance would appear on all of the following except the:
a) balance sheet.
b) income statement.
c) post-closing trial balance.
d) statement of owner’s equity.
b) income statement.
