True/False
Indicate whether the statement is true or
false.
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1.
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Adjusting entries are recorded on the next journal page following the page on
which the last daily transactions for the month are recorded.
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2.
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The ending account balances of permanent accounts for one fiscal period are
"zeroed out" for the next fiscal period.
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3.
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Accounts used to accumulate information until it is transferred to the
owner's capital account are called real accounts.
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4.
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Nominal accounts are also known as temporary accounts.
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5.
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Temporary accounts show changes in the owner's capital for a single fiscal
period.
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6.
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Temporary accounts begin a new fiscal period with the ending balance from the
previous fiscal period.
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7.
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If a business incurs a net loss, the closing entry is a credit to the
owner's capital account and a debit to the income summary account.
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8.
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A trial balance prepared after the closing entries are posted is called a
post-closing trial balance.
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9.
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Only general ledger accounts with balances are included on a post-closing trial
balance.
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10.
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Although the temporary accounts are closed and have zero balances, they still
appear on a post-closing trial balance to prove that they've been "zeroed out."
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Matching
Use the word list provided
below. Not all words will be used; some may be used multiple times. Copy and paste from the list.
Misspellings will be counted as incorrect.
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A. | neither revenue nor expense account | G. | $
750.00 | B. | adjusting entries | H. | decrease the amount of owner's equity | C. | has a debit
balance | I. | accounting
cycle | D. | list price | J. | permanent accounts | E. | it does not have a normal balance
side | K. | revenue and expense
accounts | F. | batch report | L. | debit Insurance Expense for $1,800.00 and credit Prepaid Insurance for
$1,800.00 |
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1.
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The income summary account is unique because ____.
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2.
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If the beginning balance of Supplies was $2,500.00 and the ending balance of
Supplies is $1,750.00, what is the amount of the adjusting entry to Supplies Expense for the
period?
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3.
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The series of accounting activities included in recording financial information
for a fiscal period is called a(n) ____.
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4.
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Accounts used to accumulate information from one fiscal period to the next are
called a(n) ____.
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5.
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A temporary account titled Income Summary is used to summarize the
closing entries for the ____.
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6.
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Withdrawals are assets that the owner takes out of a business and which
____.
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7.
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When total expenses are more than revenue resulting in a net loss, the income
summary account ____.
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8.
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Journal entries recorded to update general ledger accounts at the end of a
fiscal period are called a(n) ____.
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9.
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The drawing account is a(n) ____.
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10.
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If the balance in Prepaid Insurance is a debit of $2,400.00 and the value of
insurance coverage remaining at the end of the period is $600.00, what entry should be made to adjust
Insurance Expense and Prepaid Insurance?
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