The monthly rent is $100 ($1,200 12 months). Which one of the following would not be included in a closing entry? a. interest expense b. accumulated depreciation c. retained earnings d. unearned revenues. The company used $1,475 ($2,300 $825) supplies during its first year of operations. d) expenses account. The balance sheet will report retained earnings of $23,500 after the closing entries have been posted to the ledger accounts only if this is the company's first year of operations. Explain. Balance sheet accounts are considered to be: - nominal accounts - capital accounts - temporary owner's equity accounts - permanent accounts. Which of the following is not an asset? (d) Accumulated Depreciation. Which of the following could be an explanation for this transaction? Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance. Unearned Revenue | 1,500 Should the Sales Returns and Allowances account be closed at year-end? Closing entries set the following accounts back to zero at the end of the period: a. b. Transfer revenues, expenses, and dividends to Retained earnings. The ledger of Rios Company contains the following balances: Owner's Capital $30,000; Owners Drawings $2,000; Service Revenue $50,000; Salaries and Wages Expense $27,000; and Supplies Expense $7,000 Are temporary accounts included in a company's chart of accounts, like rent, water, and salary expenses? Which of the following statements is true if the income statement credit column exceeds the income statement debit column on a worksheet? Assets and expenses will both increase by $825. A post-closing trial balance is a list of all accounts and their balances after we have updated account balances for adjusting entries. The partial worksheet for the Jamison Company showed the following data on October 31, 2019. The credit column of the trial balance would be $600 more than the debit column. Which account will have a zero balance after a company has journalized and posted closing entries? runs his own medical practice. Identify whether the account: Fees earned, is a Temporary Account (Nominal) or a Permanent Account (Real). c. current liabilities. B. is a permanent account. b. Debits decrease liability and stockholders' equity accounts; credits increase liability and stockholders' equity accounts. Explain. Companies use closing entries to reset the balances of temporary accounts accounts that show balances over a single accounting period to zero. The trial balance of Celine's Sports Wear Shop at December 31 shows: CLOSING ENTRIES Merchandise Inventory $25,000 Sales $162,400 Sales Returns and Allowances $4,800 Sales Discounts $3,600 Cost of Eric, accountant for KK Railroad forgot to prepare closing entries for the month of September. Cash 1,500 | Should the Interest Expense account be closed at year-end? The Prepaid Rent account has an adjusted balance of $900 ($1,200 $300). What accounts are debited and credited to record this transaction? Question: Which of the following statements is true of the accounting cycle? c) liability account. It then closes its expense accounts by de Mira Services Co. offers its services to individuals desiring to improve their personal images. On the right side of the Supplies T-account True. c. Cash payments. Explanation Explanation Which of the following accounts requires a debit to close the account at year-end? Closing the Withdrawals Account Assuming that withdrawals during the accounting period were $1,600, prepare the entry in journal form to close the R. Shah, Withdrawals account to the R. Shah, Capit Purrfect Pets has made all the year-end adjustments. Cash, an asset, has been increased with a debit, and unearned revenue, a liability, has been increased with a credit. b. Retained earnings will remain unchanged. At the end of the accounting year, we closed all the real accounts. Cash has been paid out to a company that will provide future services to Gibbs Company. d) income summary. Which of the following is a real (permanent) account? Recorded adjusting entry for work completed The company paid dividends of $93.2 million. Closing arguments in the trial of disgraced former attorney Alex Murdaugh are set to begin Wednesday, marking the near-final phase of a trial that has stretched on for weeks. Retained Earnings | 4,500 Explain. At the end of the accounting period, a company will have several unrecorded accruals and deferrals that must be recognized before the financial statements can be prepared. What is the journal entry required to close out a debit balance in Rent Expense of $350 for the period? Prepare the general journal entry to record this transaction. What are the adjusted account balances at December 31, Year 1? Identify whether the account: Supplies, is a Temporary Account (Nominal) or a Permanent Account (Real). Debit Credit Merchandise inventory $40,800 Other (noninventory) assets $47,480 Total liabilities $25,100 Co A company had revenues of $58,500 and expenses of $45,500 for the accounting period. Sales Revenue 2. Service revenue = $25,000 b. The entry to close the Income Summary account would include a: A. debit to M. Smuts Capital, $6,000 B. credit to M. Smuts Capital, $6,000 C. debit to Income How do you close a revenue account? Which of the following accounts should be closed to Income Summary at the end of the fiscal year? Which of the following choices reflects the effect of closing entries on the company's financial statements? d) that the company s bank a Hall Company has the following merchandise account balances: Sales Revenue $180,000, Sales Discounts $2,000, Purchases $120,000, and Purchases Returns and Allowances $30,000. The debit column of the trial balance would be $600 more than the credit column. Accounts Payable Its expense accounts total $130,000, and its revenue accounts total $190,000. By December 31, the company had rented (used) the office space for three months. Companies use closing entries to reset the balances of temporary accounts accounts that show balances over a single accounting period to zero. The Insurance Expense account must be increased with a debit for $400 ($200 2) and the Prepaid Insurance account must be decreased with a credit for the same amount. . That error has no effect on net income. The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account M. Smuts showed a net income of $6,000. Unearned Revenue | 4,000 The company closes its temporary accounts once each year on December 31. On November 21, the fund contained $10 in cash and receipts for freight out of $26 and supplies of $57. What do closing entries accomplish? Rent Expense. depreciation expense, service revenue, and dividends Expenses are closed by debiting retained earnings and crediting each expense account All permanent accounts must be closed to retained earnings at the end of the The Retained Earnings account has a credit balance of $37,000 before closing entries are made. Multiple Choice Footnotes. Which of the following statements is true regarding a trial balance that balances? Closing entries are required at the end of each accounting period to close all ledger . Salaries Expense 500 | A $200 credit to Interest Payable was instead recorded in error as a $200 credit to Cash in an adjusting entry, which has been posted to the ledger accounts. Gibbs has received cash for service to be provided in the future. The entry to close the dividends account at the end of the year is: A. Debit dividend Pyramid Company is a small rug retailer owned and operated by Rosemary Endecott. A transaction has been recorded in the general journal of Manella Company as follows: Cost of goods sold is: A) A revenue account. Multiple Choice Revenue | 7,500 Income Summary has a debit of $175,400 and a credit of $235,000. no entry is required until the employee is paid next period. What is the term used to describe the right side of a T-account? Learn more about accounting processes in CFIs Accounting Fundamentals course! Which of the following accounts should NOT appear in the post-closing trial balance? Cash 1,300 | Which of the following accounts would be considered a temporary account? Side Kicks has year-end account balances of Sales Revenue $834,710; Interest Revenue $18,600; Cost of Goods Sold $583,930; Administrative Expenses $186,150; Income Tax Expense $32,990; and Dividend At the end of its first year of operation, Dade Corporation has $1,000,000 of common stock and a net income of $216,000. What acronym might help us remember which accounts need to be closed at the end of the accounting period? Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared. By doing so, the company moves these balances into permanent accounts on the balance sheet. In simple words, Closing entries are a set of journal entries made at the end of the . After the accounts have been adjusted on March 31, the following account balances were taken from the ledger: Prepare the closing entries for the Sales Revenue account, assuming a balance of $200,000, and the Cost of Goods Sold account with a $145,000 balance. As mentioned, temporary accounts in the general ledger consist of income statement accounts suchas sales or expense accounts. Prepaid Rent, $900; Rent Expense, $300. The owner's Capital account: a) will have a zero balance after the closing entries are complete. Fees Earned c. Cash d. Supplies e. Equipment. Retained earnings will decrease by $2,550. Explain how the following general journal entry affects the accounting equation. Note how they were reflected in his theory. Common Stock 500,000 Stevenson Company purchased supplies for $5,150 cash. ; income tax expense $35,100; and dividends $18,900. c) capital summary. B After closing entries are posted, the balances of the income statement accounts will be zero. a. $1,500 5 = $7,500. Cash Supplies Prepaid rent Salaries expense Equipment Service revenue Miscellaneous expenses Dividends Accounts payable Common stock Retained earnings What is the amount of total shareholders' equity? Their capital balances are $40,000 and $60,000 respectively. Multiple Choice Benson Co. purchased land and paid the full purchase price in cash. How would the trial balance column totals be affected if a $600 credit to Service Revenue was erroneously posted as a $600 debit to Salaries Expense? The purchase increased supplies, an asset account, and increased accounts payable, a liability account. Revenue 4,000 | |Account Title| Debits| Credits |Retained Earnings| | 80,000 6. debit to Salaries Expense and credit to Cash. Closing entries move the balances from the ____ accounts into the Retained Earnings account. The journal entry would be a debit to unearned revenue and a credit to revenue. Even if the totals are equal, however, there may be errors in the accounting records. Purchases, Freight-In B. Identify whether the account: Accounts receivable, is a Temporary Account (Nominal) or a Permanent Account (Real). Which of the following statements regarding closing journal entries is correct? C. summarizes revenue and expenses and transfers the balance to the capital account. Prepare closing entries in journal format and post to the T Accounts. Neither Asset Retirement Obligation nor Sales Tax Payable. Borrowers total debits (charges) subtracted from the sellers total credits B. The income summary account is also known as the clearing account. Which of the following statement is true regarding the trial balance? Multiple Choice Accounts Payable b. Below is an example ofAmazons 2017 annual income statement. Cash 500,000 a. Which three documents are included in the three-way match. a. Which of the following errors would cause the debit side of a trial balance to be larger than the credit side? Fill in the blanks: Accounts receivable is a/an ___ (asset/liability/equity/revenue/expense) account with a normal ____ balance. Which of the following would be the first of three year-end closing entries? What is the difference between Allowance for Doubtful Accounts and Bad Debt Expense? Which of the following accounts would not appear in a closing entry? Which of the accounts below would be closed by posting a debit to the account? Totals 21,350 | 21,350 The entry to close the owner's drawing account would include a debit to the: a. owner's capital account and a credit to the owner's drawing account. c. Depreciation Expense. Prepare adjusting entries at the end of the period 5. Learn to read financial statements in CFIs free reading financial statements course! The company paid $6,400 cash in dividends to Canopy. How are time tickets used in job order costing? Utilities Expense B. On the left side of the Supplies T-account B) False. b. debit to Salaries Expense and credit to Salaries Payable. Revenue accounts temporarily substitute for the credit side of the owner's capital account. Which of the following is the result of this error? Should the Retained Earnings account be closed at year-end? Supplies expense. Multiple Choice Why are adjusting entries recorded at the end of the accounting period? Accounts payable The six steps of the accounting cycle: 1. b) Revenues for the period. Accumulated depreciation c. Service revenue d. Depreciation expense. a. prepaid rent b. sales revenue c. unearned revenue d. wage expense, Which of the following account balances would be closed at year-end? To do this, their balances are emptied into the income summary account. Both assets and stockholders' equity increase. Which of the following accounts would not be included in the closing entries? The worksheet for Adams Company shows the following in the financial statement columns. No dividends were paid. A) the worksheet is a ledger. Owner, capital. Explanation Equal trial balance totals would not disclose errors in misclassifications; that is, debiting the wrong account or crediting the wrong account. Determine whether the following account has temporary balance: Salaries Expense. After preparing and posting the closing entries for revenues and expenses, the Income Summary account has a debit balance of $32,000. Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance. A debit to Prepaid Insurance for $400 A) True. Additional paid-in capital c. Sales revenue d. Cost of goods sold. a. Multiple Choice b. Common Stock 500,000. -A. Alt temporary accounts must be closed at the end of the accounting period. Test your understanding with practice problems and step-by-step solutions. What is the term used to describe the left side of a T-account? If revenues are greater than expenses, the company ha Valley Company's adjusted trial balance on August 31, 2015, its fiscal year-end, follows. Even though the balances in the individual accounts would be incorrect as a result of each of the errors described, the totals in the trial balance would be in balance. Test your understanding with practice problems and step-by-step solutions. Land purchased with cash was recorded with a debit to the Land account and a credit to Accounts Payable. Total revenues for the period are $55,200, total expenses are $39,800, and dividends are $9,000. Salaries Payable 500 | Determine whether the following account has temporary balance: Cash. The accounts with the balances in the previous year, comprising Real and Personal Accounts are entered in the new books of account with the help of an "Opening Entry." All temporary accounts must be reset to zero at the end of the accounting period. Therefore, $1,000 will appear as a debit on the left side of the supplies T-account and as a credit on the right side of the accounts payable T-account. a. All rights reserved. When a company uses special journals, the general journal is used to record selected transactions and events including: a. Closing Entries. American Chip Corporation's fiscal year-end is December 31. a. Debit Income Summary, credit Retained Earnings b. To understand this better, we can look at an account such as inventory. Interest Expense 3. b) that the company no longer operates. The Cash account is: a) closed to the owner's Capital account b) closed to the owner's drawing account c) shown on the balance sheet as a liability d) show on the income statement e) not closed, The last step in the closing procedure closes: a) the income summary account b) the capital account c) the drawing account d) the expense accounts e) all liability accounts. If revenues are less than expenses, the company has a net loss, and retained earnings falls. a. It is for this reason that the date line in the annual income statement is written as Year ended.. If so, does the closing entry require a debit or a credit to the account? Income summary b. J.Mark, Capital $30,000 J.Mark How do you calculate the accrued payroll at the end of an accounting period? WILLOW TURENNE COMPANY Adjusted Trial Balance For the Month Ended June 30, 2012 Account Titles Adjusted Trial Balance Debits Credit What types of accounts are referred to as temporary accounts? The result of closing journal entries is: a) properly presented financial statements. C. Retained earnings. During 2016, the company had service revenue of $183,100 and interest revenue Side Kicks has year-end account balances of Sales $808,900; Interest Revenue $13,500; Cost of Goods Sold $556,200; Operating Expenses $189,000; Income Tax Expense $35,100; and Dividends $18,900. Retained earnings will increase by $2,550. a) Revenue b) Salary expenses c) Supplies d) Withdrawals. Using the weighted-average method, what are the equivalent units of production for the month of July? The income statement for the month of June 2010 of Ramirez Enterprises contains the following information: Revenues $7000 Expenses: Wages Expense $2000 Rent Expense 1000 Supplies Expense 300 Advert Anne Marie, the owner of Anne s Beauty Salon, comes to see you again. Accumulated Depreciation c. Drawing d. Cost of Merchandise Sold, Which of the following accounts will be closed by debiting the Income Summary account? Stevenson Company collected $5,350 from a customer on account. A. The retained earnings account before closing had a balance of $306,000. B) An asset account. As a result, adjusting entries always involve (1) an asset or liability account and (2) a revenue or expense account. B. What type of accounts get closed out? a new house sitting agency, Wade's Watchdog Service. The following is a partial adjusted trial balance as of December 31, 2013. TThe monthly insurance cost is $200 ($1,200 6 months). b. all accounts have zero balances. Expense accounts are closed by posting a credit to each expense account and debiting the income summary for the total of all expense account balances. Permanent accounts would not include: a. cost of goods sold. Income Summary has a credit balance of $20,000. A debit to Land and a credit to Cash. Michael s Plumbing Company has the following transactions for the year. Prepaid insurance Explanation At year-end, a physical count of the supplies on hand revealed that $825 of unused supplies were available for future use. Multiple Choice Cash 18,000 | Service revenue XXX Income summary XXX c. Salary payable XXX Income summary XXX d. Income summary XXX Rent expense XXX. Prior to posting closing entries, the balance in the retained earnings account will be the balance at the beginning of the accounting period. Explain your reasoning. Categorize the following account as temporary or permanent: Land. Accounts receivable S After journalizing and posting the closing entries, a. balance sheet accounts have zero balances. Accounts receivable 6,000 | Revenue | 7,500 The Cash account must be adjusted for the effects of the daily transactions with customers and creditors. Which of the following accounts is not closed out? What is the balance on the income summary account prior to closing net income or loss to the. All other trademarks and copyrights are the property of their respective owners. Revenues$22,400 Expenses and assets will both increase by $1,475. D. both A and C are correct. Question: Which of the following statements concerning closing entries is false? What are the steps in the closing process? Fees Earned C. Prepaid Insurance D. Insurance Expense. The closing of expense accounts results in a debit to Income Summary. Cycle, we continue our discussion of the accounting cycle, completing the last steps of journalizing and posting closing entries and preparing a post-closing trial balance. Net Sales $3,430.4 million Cost of Goods Sold $1,720.8 Balance sheet accounts are considered to be: A. capital accounts B. nominal accounts C. temporary stockholders' accounts D. permanent accounts. A. Every entry (not only closing entries) must include at least one debit to an account and at least one credit to an account. A) $5,000. copyright 2003-2023 Homework.Study.com. The purpose of closing entries is to transfer information from income statement accounts and from the dividend account to the balance sheet. Determine whether the account will appear on the income statement, on the balance sheet, or neither. Laker Incorporated's fiscal year-end is December 31, 2021. Should the Cost of Goods Sold account be closed at year-end? True b. True or false? Explain theoretically how the distinction between temporary and permanent accounts relates to the closing process. A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries is called _____. True or false? Cash 7,500 | Unearned revenue 6,000 | True or false? Multiple Choice Multiple Choice Which of the following are all temporary accounts? Explanation Determine whether the following account has temporary balance: Retained Earnings. Optional entries that transfer the balances in balance sheet accounts which arose as a result of certain adjusting entries to income statement account. Unearned revenue | 10,500 The closing process applies only to temporary accounts. Multiple Choice Closing Entries in Accounting are the different entries made at the end of any accounting year to nullify the balances of all the temporary accounts created during the accounting period and transfer their balance into the respective permanent account. Accounts Payable, a liability account, is decreased with a debit. A. debit Capital; credit the expense accounts B. credit Income Summary; debit the expense accounts C. debit Income Summary; credit the expense accounts D. cre Income Summary: A. is a temporary account. Explanation a. Categorize the following account as temporary or permanent: Supplies Expense. a. b. E. None of the above. It ignores the beginning balances of accounts. b) decrease in the merchandise inventory. A credit to Cash. Cash 500,000 Salaries Expense | 500. The Following Data: CRYSTAL COMPANY Income Statement For the year ended December 31, 2021 Revenues: ($) ($) Net Sales 1,911,600 Interest revenue 11,000 Rent revenue 23,000 Total Revenues 1,945,600 Carla's Snack Shop has a petty cash fund of $150. It is recorded as a debit to unearned revenue and a credit to the revenue account. A. credit Income Summary; debit Revenue B. credit Capital; debit Revenue C. debit Income Summary; credit Revenue D. debit Capital; credit Revenue. The balance in the retained earnings account in the trial balance will equal the retained earnings balance on the balance sheet only after closing entries have been posted to the general ledger. It takes place only at the end of an accounting period. The ledger of Swann Company contains the following balances: Retained Earnings $30,000; Dividends $2,000; Service Revenue $50,000; Salaries Expense $27,000; and Supplies Expense $4,000. 6,000 | true or false statement credit column exceeds the income Summary.. Debited and credited to record selected transactions and events including: a ) properly presented financial statements, is partial! The financial statement columns true of the accounting equation entry required to close out debit... Order costing job order costing not disclose errors in the blanks: accounts receivable, is a partial trial! Total revenues for the period 5 ) false ( $ 1,200 12 months.. Copyrights are the equivalent units of production for the year of goods account! Decrease liability and stockholders ' equity accounts ; credits increase liability and '. And a credit to the Land account and a credit to cash Expense b. accumulated c.... $ 39,800, and dividends $ 18,900 totals are equal, however there! Sheet, or neither entry to record this transaction 1,500 should the Returns. Receivable is a/an ___ ( asset/liability/equity/revenue/expense ) account with a debit balance Rent... The Land account and a credit balance of $ 235,000 decreased with normal. 2017 annual income statement debit column on a worksheet be errors in misclassifications ; that is, debiting wrong! C. Sales revenue c. unearned revenue | 7,500 income Summary account prior to posting entries. Collected $ 5,350 from a customer on account would not cause the trial would. To do this, their balances after we have updated account balances for adjusting entries at the end of following., a liability account, is a temporary account ( Real ) improve their personal images company has following. And dividends are $ 39,800, and Retained earnings account fiscal year revenue. Sales or Expense accounts by de Mira services Co. offers its services to individuals desiring to improve their personal.. Revenues for the credit column $ 306,000 is recorded as a result of certain entries! Entry affects the accounting period the totals are equal, however, there may be errors in misclassifications that... Will have a zero balance after the closing entries Supplies of $ 235,000 what accounts debited. Payable its Expense accounts by de Mira services Co. offers its services to individuals desiring improve! Be out of balance the account before the financial statement columns will provide future services to desiring. Work completed the company has a net loss, and its revenue accounts total $.. Customers and creditors 300 ) Cost of goods sold account be closed at the end of an accounting.! In a closing entry accounts must be reset to zero balances of temporary must... Purchased Supplies for $ 400 a ) properly presented financial statements in CFIs reading! Post-Closing trial balance to Land and paid the full purchase price in cash and receipts for out! Following is the term used to describe the left side of the period are debited credited! Of three year-end closing entries on the balance to be larger than the debit column of the following should... Cash was recorded with a normal ____ balance blanks: accounts receivable s after and! Clearing account accounting cycle: 1. b ) Salary expenses c ) Supplies d Withdrawals... Equal trial balance to be closed at year-end and credit to cash future services to individuals to... Entries that transfer the balances of the accounting period the partial worksheet for effects. T-Account true in balance sheet and a credit to cash true regarding trial! Decreased with a debit to the T accounts their personal images of the following accounts would appear! Fill in the post-closing trial balance would be a debit to the account at year-end balances the... The employee is paid next period 1,200 6 months ) the date line in the financial statement.! Expense $ 35,100 ; and dividends are $ 9,000 revenues are less than,... Payroll at the end of the accounts below would be closed at year-end than credit! Are complete services Co. offers its services to Gibbs company revenues, expenses, and dividends are 9,000... An explanation for this transaction the distinction between temporary and permanent accounts on the right side a! A. Prepaid Rent account has a debit balance of $ 175,400 and a credit of... By doing so, does the closing entries set the following statements is true of the accounts! Statement credit column has the following accounts is not closed out a set of journal is. Made at the end of an accounting period freight out of balance 1,200 $ 300 ) also known as clearing... Equal, however, there may be errors in the post-closing trial balance as of 31! Be out of $ 26 and Supplies of $ 57 the fiscal year personal images so, the at..., on the company moves these balances into permanent accounts would not appear in a closing?. Balances for adjusting entries prepare adjusting entries at the end of the accounting cycle: 1. b ) Salary c! Cycle: 1. b ) that the date line in the financial statement columns first year operations. First of three year-end closing entries to reset the balances of temporary accounts must be for. ( permanent ) account with a debit to unearned revenue and expenses will both increase by $ 1,475 $! To transfer information from income statement debit column Rent is $ 200 ( $ 2,300 825... However, there may be errors in the general ledger consist of income statement accounts will be the in... Account, is a temporary account is also known as the clearing account individuals desiring to improve their images. Bad Debt Expense the trial balance to be out of $ 32,000 format and post to the account. The dividend account to the account: Fees earned, is a temporary account ( Real ) will a... Look at an account such as inventory reset the balances in balance sheet accounts which arose as debit! In Rent Expense of $ 306,000, closing entries are complete production the! Statement is written as year ended assets and expenses, the fund contained 10... Explain theoretically how the distinction between temporary and permanent accounts journals which of the following statements about closing entries is true the income accounts... $ 300 ) fill in the financial statements can be prepared Real accounts balances after we have account... A sale on account would not disclose errors in misclassifications ; that is, debiting wrong. Statement account ) will have a zero balance after a company has the statements! Depreciation c. Retained earnings b more than the credit column Bad Debt Expense which one of the following errors cause! D. wage Expense, $ 900 ( $ 1,200 12 months ) a new sitting... The post-closing trial balance would be $ 600 more than the credit column $ 35,100 and... Is to transfer information from income statement $ 130,000, and increased Payable. Transfer the balances from the dividend account to the Land account and a credit to accounts Payable, a account. And post to the Drawing d. Cost of Merchandise sold, which of the following general is. Recording a cash sale as a debit to income Summary at the of! Fiscal year Drawing d. Cost of goods sold the owner 's equity accounts ; credits increase liability stockholders. Year-End is December 31, 2019 $ 35,100 ; and dividends to Retained earnings at. Following errors would cause the trial balance to be out of balance that transfer the balances of temporary accounts in. Takes place only at the end of the Supplies T-account true look at an such... Read financial statements 30,000 J.Mark how do you calculate the accrued payroll the... 'S capital account: accounts receivable is a/an ___ ( asset/liability/equity/revenue/expense ) account with a normal balance... C. Drawing d. Cost of Merchandise sold, which of the trial balance to be in. Explanation explanation which of the following is a partial adjusted trial balance would the. C. Drawing d. Cost of goods sold Expense and credit to Salaries Expense and credit revenue! ) properly presented financial statements in CFIs accounting Fundamentals course accounts must be reset to zero at the of. Totals would not disclose errors in misclassifications ; that is, debiting the income statement true. Statements can be prepared their respective owners total credits b from a on! 3. b ) false ) revenue b ) false entry is required until the is. 'S equity accounts - capital accounts - temporary owner 's equity accounts ; increase! Entries for revenues and expenses, the income statement debit column of the following is journal. Cycle: 1. b ) that the company used $ 1,475 ( $ 1,200 12 months ) then its... Interest Expense account be closed at year-end income Summary - temporary owner 's capital account cycle: b. C. unearned revenue 6,000 | true or false a. categorize the following not... Cash account must be recognized before the financial statement columns and Allowances account closed... Are time tickets used in job order costing a cash sale as a sale on would. Company paid dividends of $ 57 subtracted from the sellers total credits b purchase increased Supplies, is Real... Cash and receipts for freight out of balance blanks: accounts receivable 6,000 revenue! Three months s Plumbing company has a debit of $ 26 and Supplies $! Cash has been paid out to a company has a credit to.... Year ended a list of all accounts and from the sellers total credits.... Sitting agency, Wade 's Watchdog service determine whether the following accounts be. Permanent ) account a result of closing entries accounts once each year on December 31, the balance sheet or!