Principles of Accounting: Closing Entries

What is the primary purpose of closing entries in accounting?

• To prepare financial statements

• To close temporary accounts

• To open new accounts

• To record transactions.

Closing entries are used to transfer the balances of temporary accounts to the ________.

• A) Income Statement

• B) Balance Sheet

• C) Retained Earnings

• D) Cash Flow Statement

What key should you press to expand the screen while viewing the presentation?

• F1

• F5

• F11

• F12

To navigate to each slide in the presentation, you should click the ______.

• mouse

• button below

• keyboard

• screen

What is the last step in the accounting cycle?

• Opening Entries

• Closing Entries

• Adjusting Entries

• Posting Entries

The purpose of the Closing Entries is to ______ the balances of certain accounts at the end of the fiscal period.

• open

• zero out

• increase

• decrease

What are temporary accounts in accounting?

• Accounts that accumulate balances for multiple periods

• Accounts that accumulate balances for one accounting period only

• Accounts that never accumulate balances

• Accounts that accumulate balances indefinitely.

Temporary accounts are closed at the end of the accounting period so that they can begin accumulating new balances that apply only to the ______ period.

• previous

• future

• current

• indefinite

Which of the following is not a type of temporary account?

• Revenue

• Expense

• Asset

• Income Summary

Fill in the blank: The temporary account used to summarize revenues and expenses before transferring to capital is called ________.

• Revenue

• Expense

• Income Summary

• Drawing