Accounting Chapter 8

These accounts are listed on a post-closing trial balance and still have balances after closing entries.

• Income Statement Accounts

• Permanent Accounts

• Temporary Accounts

This type of accounts are closed to a zero balance for the next fiscal period

• Asset Accounts

• Capital Account

• Permanent Accounts

• Temporary Accounts

What is the purpose of adjusting entries?

• To close temporary accounts

• To update accounts that have changed

• To balance capital

Where do we get information to record our adjusting entries in a journal

• From the Balance Sheet

• From the Income Statement

• From the Adjustment Columns of the Worksheet

After the supplies adjusting entry has been posted, the supplies account balance will be equal to _____________.

• The amount of supplies we started with

• The amount of supplies we have left

• The amount of supplies we used up

Supplies Expense is equal to

• The amount of supplies we started with

• The amount of supplies we have left

• The amount of supplies we've used up throughout the month

What is the purpose of closing entries?

• To update accounts that have changed

• To balance drawing

• To get them ready for the next fiscal period by making them zero

What does the income summary account really represent?

• Net Income or Net Loss

• Same balance as Capital

• Worth of your business

What are two unique things about the income summary account?

• It always has a CREDIT balance and it changes weekly

• It always has a DEBIT balance and it's only used one day per month

• It has NO Normal balance and it changes weekly

• It has NO Normal balance and it is only used ONE DAY PER MONTH

What balance would the income summary have if we had a NET INCOME?

• Credit Balance

• Debit Balance