Chapter 8 Flashcards
Accounts used to accumulate information from one fiscal period to the next.
Permanent or Real Accounts
Accounts used to accumulate information until it is transferred to the owner’s capital account.
Temporary or Nominal Accounts
Journal entries used to prepare temporary accounts for a new fiscal period.
Closing Entires
A trial balance prepared after the closing entries are posted.
Post-Closing Trial Balance
The series of accounting activities included in recording financial information for a fiscal period
Accounting Cycle
Which accounts are debited and credited for Closing entry for Sales
Income Summary, Credit
Sales, Debit
Which accounts are debited and credited for Closing entry for all expense accounts
Income Summary, Debit
All Expense Accounts, Credit
Which accounts are debited and credited for Closing entry for Income Summary with a net income
Capital, Credit
Income Summary, Debit
Which accounts are debited and credited for Closing entry for Income Summary with a net loss.
Capital, Debit
Income Summary, Credit
Which accounts are debited and credited for Closing entry for owner’s drawing account.
Capital, Debit
Drawing, Credit
Which accounting concept applies when a work sheet is prepared at the end of each fiscal cycle to summarize the general ledger information needed to prepare financial statements?
Accounting Period Cycle
The ending account balances of permanent accounts for one fiscal period are
the beginning account balances for the next fiscal period
Which of the following accounts is a temporary account?
Cash, Accounts Payable, Clyde Sullivan, Capital, or Rent Expense.
Rent Expense
Which accounting concept applies when expenses are reported in the same fiscal period that they are used to produce revenue?
Matching Expenses with Revenue
When revenue is greater than total expenses, resulting in a net income, the Income Summary account has a
credit balance
Information needed for recording the closing entries is obtained from the
work sheet’s Income Statement and Balance Sheet columns
Income Summary is
a temporary account
After the closing entries are posted, the Sales account balance should be
zero
After the closing entries are posted, the owner’s capital account balances should be the same as shown
on the balance sheet for the fiscal period
The accounts listed on a post-closing trial balance are
general ledger accounts with balances after the closing entries are posted
