Unit 4 Flashcards
Balance sheet accounts are considered to be
permanent accounts
After all closing entries have been posted, the revenue account will have a balance of
$0
What things are closed to the Income Summary account?
Revenues and expenses
The balance in the income summary account before it is closed will be equal to
the net income or loss on the income statement
In order to close the dividends account, the…
retained earnings account should be debited
In preparing closing entries the retained earnings account…
will be debited if there is a net income for the period
What is not closed to the Income Summary?
Dividends
If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a
credit to the retained earnings account
Zen Arcade paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $47,000. The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $27,000 had been accrued at year end on December 31. The correcting entry is
DR Salaries and Wages Payable 27,000
CR Salaries and Wages Expense 27,000
In preparing closing entries what account will be credited?
expense account
The entry to close the revenue account includes a
debit to Income Summary
