Chapter 8-10 Exam Accounting 1

Which is a temporary account

• Accounts Receivable

• Accounts Payable

• Consulting Fees

• Capital, Susan Lee

Which is a permanent account

• Withdrawals

• Advertising Expense

• Car wash Revenue

• Computer equipment

If the date in the heading of an Income Statement is For the Year Ended December 31, 20XX, it means that the net income was earned in the month of December.

• True

• False

A net income means that the business earned more money than they spent.

• True

• False

Outback Guide Service has total revenue of $5000 and total expenses of $2000. Therefore, they have:

• a net profit of $3,000

• A net loss of $7000

• A net profit of $5000

• A net loss of $2000

The first step in the closing process is to close the _____ accounts by _____ them

• Expenses....crediting

• Revenue...debiting

• Income Summary...crediting

• Withdrawals...debiting

The second step in the closing process is to close the ______ accounts by ____ them

• Expense...crediting

• Expense...debiting

• income summary...crediting

• income summary...debiting

When I credit an expense account to close it, what account do I debit?

• Revenue

• Capital

• Income Summary

• Cash in bank

If I have a net profit, will my income summary account be credit heavy or debit heavy after closing the revenue and expense accounts?

• credit heavy

• debit heavy

If I have a net loss, my income summary will be ____ heavy after closing the revenue and expense accounts, so I'll need to _____ to close it

• credit, debit it

• debit, credit it