journal entries recorded to update general ledger accounts at the end of a fiscal period are called
adjusting entries
Adjusting entries are recorded on the next journal page following the page on which the last daily transactions for the month are recorded.
True
If the beginning balance of Supplies was $2,500.00 and the ending balance of Supplies is $1,750.00, what is the amount of the adjusting entry to Supplies Expense for the period?
$750
If the balance in Prepaid Insurance is a debit of $2,400.00 and the value of insurance coverage remaining at the end of the period is $600.00, what entry should be made to adjust Insurance Expense and Prepaid Insurance?
Debit Insurance Expense for $600.00 and credit Prepaid Insurance for $600.00
Accounts used to accumulate information from one fiscal period to the next are called
permanent accounts
The ending account balances of permanent accounts for one fiscal period are "zeroed out" for the next fiscal period
False
Accounts used to accumulate information until it is transferred to the owner's capital account are called real accounts.
False
Nominal accounts are also known as temporary accounts.
True
Temporary accounts show changes in the owner's capital for a single fiscal period
True
Temporary accounts begin a new fiscal period with the ending balance from the previous fiscal period.
False
The income summary account is unique because
it does not have a normal balance side.
Withdrawals are assets that the owner takes out of a business and which
decrease the amount of owner's equity
The drawing account is a(n
neither revenue nor expense account
If a business incurs a net loss, the closing entry is a credit to the owner's capital account and a debit to the income summary account
False
A trial balance prepared after the closing entries are posted is called a post-closing trial balance.
True
Only general ledger accounts with balances are included on a post-closing trial balance.
True
Although the temporary accounts are closed and have zero balances, they still appear on a post-closing trial balance to prove that they've been "zeroed out."
False
The series of accounting activities included in recording financial information for a fiscal period is called a(n)
accounting cycle
When total expenses are more than revenue resulting in a net loss, the income summary account
has a debit balance
A temporary account titled Income Summary is used to summarize the closing entries for the
revenue and expense accounts
