Part One—Analyzing Accounting Concepts and Practices

Decide whether the statement is true or false:
General ledger account balances are changed only by posting journal entries.

• True
• False

Decide whether the statement is true or false:
Information needed for journalizing adjusting entries is taken from the Income Statement and Balance Sheet columns of a work sheet.

• True
• False

Decide whether the statement is true or false:
Information needed for journalizing closing entries is taken from the Adjustment columns of a work sheet.

• True
• False

Decide whether the statement is true or false:
At the end of a fiscal period, the temporary accounts are closed to prepare the general ledger for the next fiscal period.

• True
• False

Decide whether the statement is true or false:
Income Summary is a temporary account and is used only at the beginning of a fiscal period.

• True
• False

Decide whether the statement is true or false:
Amounts needed for the closing entries are obtained from the Trial Balance columns of a work sheet.

• True
• False

Decide whether the statement is true or false:
The amount of the journal entry to close the income summary account can be obtained from the statement of stockholders' equity.

• True
• False

Decide whether the statement is true or false:
The entry to close Income Summary transfers the amount of net income or net loss to the capital stock account.

• True
• False

Decide whether the statement is true or false:
The balance of the dividends account is closed to Retained Earnings.

• True
• False

Decide whether the statement is true or false:
The dividends account is a temporary account and must begin each fiscal period with a zero balance.

• True
• False