Accounting Chapter 10

These are made to close out or reduce to zero the balance of certain general ledger accounts.

• compound entry

• closing entries

• permanent accounts

• temporary accounts

This is prepared to prove that debits in the ledger accounts are equal to the credits after the closing entries have been posted.

• compound entry

• closing entry

• income summary account

• post-closing trial balance

Their balances are listed on the post-closing trial balance

• permanent accounts

• temporary accounts

A general ledger account used to accumulate and summarize the revenue and expenses for a period.

• income summary account

• post-closing trial balance

• balance sheet

• income statement

Accounts that start an accounting period with zero balance.

• permanent account

• temporary account

The purpose of the Income Summary account is to ____________.

• to close the temporary accounts

• to accumulate and summarize the revenue and expenses for the period

• to transfer the balance of the Income Summary account to the capital account

• to report the net income or net loss for the account period

Transactions involving revenue, expenses, and withdrawals are recorded in the _________.

• permanent accounts

• financial statements

• general journal

• temporary capital accounts

The balance of the revenue account is transferred to the ________.

• debit side of the cash in bank account

• credit side of the owner's capital account

• credit side of the Income Summary account

• debit side of the owner's withdrawals account

Which of the following statements is true?

• The Income Summary account is located in the owner's equity section of the general ledger.

• The Income Summary account has a normal debit balance

• The Income Summary account is a permanent account

• The Income Summary account is used throughout the accounting period

Which of the following questions will NOT be answered on the heading of Post Closing Trial Balance

• How

• Who

• What

• When