Accounting: Chapter 8 Test

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The journal entry to adjust Supplies is

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debit Supplies Expense; credit Supplies.

Front

After the adjusting entry for Supplies has been posted, Supplies Expense has an up-to-date balance, which is the

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value of supplies used during the fiscal period.

Front

Accounts used to accumulate information from one fiscal period to the next are

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permanent accounts.

Front

Temporary accounts begin each new fiscal period with a

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zero balance.

Front

When the total expenses are greater than the total revenue,

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the income summary account has a debit balance.

Front

The journal entry to close Income Summary when there is a net income is: debit Income Summary; credit owner’s capital.

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debit Income Summary; credit owner’s capital.

Front

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? Options: Business Entity, Accounting Period Cycle, Adequate Disclosure, Consistent Reporting

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Accounting Period Cycle

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Income Summary is

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a temporary account.

Front

After the closing entries are posted, the owner’s capital account balance should be the same as

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shown on the balance sheet for the fiscal period.

Front

Preparing a work sheet at the end of each fiscal period to summarize the general ledger information needed to prepare financial statements is an application of the accounting concept Accounting Period Cycle.

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True