Chapter 8 Accounting

Front

When the total expenses are greater than the total revenues,

Back

The Income Summary account has a debit balance.

Front

True or False: The balances of the liability accounts must be reduced to zero to prepare the accounts for the next period.

Back

False

Front

True or False: Journal entries used to prepare temporary accounts for a new fiscal period are closing entries.

Back

True

Front

Temporary accounts begin each new fiscal period with a

Back

Zero balance

Front

Temporary Accounts include: Assets, Liabilities, Owner's Drawing, Sales

Back

Sales

Front

True or False: The capital account’s new balance after all closing entries are posted is verified by checking it with the amount of capital shown on the balance sheet at the end of the fiscal period.

Back

True

Front

True or False: The Income Summary account has a normal debit balance.

Back

False

Front

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

Back

Zero

Front

True or False: The ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period.

Back

True

Front

True or False: Permanent accounts are used to accumulate information until it is transferred to the owner’s capital account.

Back

False