Accounting Ch. 8 Review

The last step in the accounting cycle is to

• record transactions in a journal.

• prepare a work sheet.

• journalize and post closing entries.

• prepare a post-closing trial balance.

Income Summary is a(n)

• asset account.

• liability account.

• temporary account.

• permanent account.

When the total expenses are greater than the total revenues,

• the Income Summary account has a credit balance.

• the Income Summary account has a debit balance.

• debits equal credits.

• none of these.

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

• revenue accounts.

• permanent accounts.

• temporary accounts.

• expense accounts.

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

• on the balance sheet for the fiscal period.

• in the work sheet’s Balance Sheet Debit column.

• in the work sheet’s Balance Sheet Credit column.

• in the work sheet’s Income Statement Debit column.

After closing entries are posted, the balance in the owner’s drawing account should be

• a debit.

• zero.

• a credit.

• none of these.

Temporary accounts begin each new fiscal period with a

• debit balance.

• credit balance.

•  zero balance.

• balance equal to the net income.

The journal entry to close Income Summary when there is a net income is

• debit Sales; credit Income Summary.

• debit owner’s capital; credit Income Summary.

• debit owner’s capital; credit Sales.

• debit Income Summary; credit owner’s capital.

Temporary accounts include assets, expenses, and the owner’s drawing account.

• True

• False

Temporary accounts are also called nominal accounts.

• True

• False