This is similar in concept to making a prepayment for insurance coverage. A closing entry is a journal entry that is made at the end of an accounting period to transfer balances from a temporary account to a permanent account. Accumulated Depreciation c. Drawing d. Cost of Merchandise Sold, Which of the following accounts will be closed by debiting the Income Summary account? Which of the following statements about debits is false? Is the Income Summary a temporary or permanent account? b) Revenues for the period. Ferraro Consulting provides risk management services to individuals and to corporate clients. Paid cash to a customer who requested a refund Explain. When the income statement is published at the end of the year, the balances of these accounts are transferred to the income summary, which is also a temporary account. There are five main types of adjusting entries that you or your bookkeeper will need to make monthly. Multiple Choice B) False. The company would record an increase in cash (a debit) of $1,300, an increase in accounts receivable (a debit) of $1,200, and an increase in revenue (a credit) of $2,500. a. net income b. income summary c. dividends d. assets. By doing so, the company moves these balances into permanent accounts on the balance sheet. Explanation Carla made withdrawals of $12,000 and Eliza made withdrawals of $17,000. Prepare the general journal entry to record this transaction. The following is the Statement of Retained Earnings for Printing Plus. A credit to Prepaid Insurance for $400 Total assets = $12,500 + $3,250 = $15,750. What is the purpose of the Income Summary account? 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 Which of the following accounts requires a debit to close the account at year-end? D. Salaries expense. B) $78,500. The purpose of closing entries is to: 1. update the retained earnings account on a daily basis. Which of the following accounts normally has a debit balance? Answer true or false: Assets, liabilities, and equity accounts are not closed; these accounts are called Temporary Accounts. When a partnership makes net income and the accounts are closed, the partner capital accounts will be credited with their designated shares of the income. 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. Total assets are understated by $200. b) that the company no longer operates. United Rug Company is a small rug retailer owned and operated by Pat Kirwan. A fellow student makes the following statement: "You can easily tell whether a company is using the cash or accrual basis of accounting. Mikaela Mundt invested $2,000 of her own money in her business. Adams Companys production cycle starts in Department A. This process is also called as the . Operating Expenses |15,500 d) permanent accoun Categorize the following account as temporary or permanent: Revenue. Explanation Salaries and Wages Expense 6/10 3,100 6/28 5,790 Bal. Unearned revenue 6,000 | Depreciation expense. Revenue accounts temporarily substitute for the credit side of the owner's capital account. 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." The actual cash received from cash sales was $18,371, and the amount indicated by the cash register total was $18,400. How do you close the expense accounts? On the left side of the Accounts Payable T-account The following data were taken from the accounting records of Lorenzo Company. Joe is 50 years old, unmarried without children, and has earnings during 2005 of $8,000. A balance of debits and credits ensures that all transactions have been recorded correctly. A. credit Income Summary; debit Revenue B. credit Capital; debit Revenue C. debit Income Summary; credit Revenue D. debit Capital; credit Revenue. All year-end adjustments had been entered, but the books had not yet been closed. The balances of these accounts areeventually used to construct the income statement at the end of the fiscal year. Common Stock 500,000 A closing entry is a journal entry that is made at the end of an accounting period to transfer balances from a temporary account to a permanent account. You will see that they have a credit balance. c. current liabilities. Sales c. Account receivable d. Both (a) & (c). a. A balance of debits and credits ensures that all transactions have been recorded correctly. Neither Asset Retirement Obligation nor Sales Tax Payable. c) that the Income Statement balances. (d) Depreciation expense account. You can see that for the date, it is written as Year ended December 31, YYYY. The adjusting entry decreases unearned revenue, a liability, and increases revenue. debit to Salaries Payable and credit to Salaries Expense. Common Stock 500,000 Additional paid-in capital c. Sales revenue d. Cost of goods sold. Multiple Choice Consulting revenue 2,500 | Accounts Debit ($) Credit ($) Cash 20,000 Accounts Receivable 30,000 Prepaid Insurance 7,500 Office . d. Interest revenue. Fitzpatrick Company had $500 of accrued salary expenses that will be paid during the following accounting period. When the perpetual inventory system is used, which of the following accounts are closed by debiting income summary? Describe the kinds of identity crises Erikson experienced in childhood and adolescence. Salaries Expense 500 | Determine whether the following account has temporary balance: Retained Earnings. Thanks for reading CFIs closing entry guide. Multiple Choice Multiple Choice Explanation Multiple Choice Approach to solving the question: I have used the similar format as provided in the question for better understanding. 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? Service Revenue 18,800 | 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. Describe the four entries that close the temporary accounts. During Year 5, Magellan Corporation earned net income of $32,000 and paid cash dividends of $8,500 to its stockholders. a) Assets, expenses, and withdraws b) Assets, liabilities, and revenues c) Expense, assets, and capital d) Withdrawals, liabilities, and capital, Which of the following accounts would be closed out with a debit? Cash 4,000 | Accounts Payable b. Common Stock 500,000. After closing revenues and expense, Natraj Company shows the following account balances. Unearned service revenue True b. Prepare the general journal entry to record this transaction. Why sales account would be debited at the end of the accounting period? (a) True (b) False. (More than one answer may be correct.) Accounts Payable c. Service Revenue d. Accumulated Depreciation. Which of the following will be included in the adjustment required on December 31, Year 1? 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. b) expense summary. Which of the following are all temporary accounts? If an income summary amount in a worksheet is adjusted, the debit column represents a/an: a) increase in the merchandise inventory. True or false? Explanation B) The worksheet is a document used to summarize data to prepare financial statements . Sales Revenue 2. transaction has been recorded in the T-accounts of Gibbs Company as follows: 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. Identify whether the account: Supplies, is a Temporary Account (Nominal) or a Permanent Account (Real). Income Summary has a credit balance of $20,000. b. Service revenue = $25,000 b. Journalize the entry to record the cash receipts and cash sales. $2,900 Explanation The company paid $52,800 in dividends during the year. no entry is required until the employee is paid next period. Rider Company is in the process of preparing its closing entries. Gibbs has received cash for service to be provided in the future. It is a ____ (temporary/permanent) account. Revenue | 4,000 a. Stevenson Company collected $5,350 from a customer on account. J.Mark, Capital $30,000 J.Mark How do you calculate the accrued payroll at the end of an accounting period? The Retained Earnings account has a credit balance of $37,000 before closing entries are made. 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. Browse through all study tools. On October 1, Year 1, Senegal Company paid $1,200 in advance for rent of office space for one year and recorded a journal entry debiting Prepaid Rent and crediting Cash for $1,200. Wages Expense, Accumulated Depreciation, Fees Income. Consulting revenue | 2,500 What is the balance on the income summary account prior to closing net income or loss to the. Prepaid Insurance Temporary accounts are accounts in the general ledger that are used to accumulate transactions over a single accounting period. A) chart of accounts B . True or false? Fees Earned c. Cash d. Supplies e. Equipment. D. both A and C are correct. Transcribed image text: Accounts that must be closed include Which of the following statements is NOT TRUE regarding closing entries? 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. It is recorded as a debit in the Cash T-account and a credit to the Common Stock account. A credit to Insurance Expense for $1,200. B. OB. c. Cash payments. Kathy, the company owner and manager, said that "rather than take the time now to prepare the closing Why are the closing entries for inventory under a periodic system more complicated than those for a perpetual system? Revenue | 4,000. Accruing salary expenses will increase Salaries Expense and increase Salaries Payable, a liability. Which of the following statements regarding credit entries is true? a. Which of the following would be the first of three year-end closing entries? Corporate Finance Institute has other resources that will help you expand your knowledge and advance your career! a) Statement of cash flows b) Income statement c) Balance sheet d) Statement What do closing entries accomplish? The trial balance of Dionne's Boutique at December 31 shows Merchandise Inventory $21,000, Sales $136,000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $92,400, I Thibodeau Company has the following merchandise account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. A) $5,000. c) all accounts are closed. The following selected accounts and amounts are from the adjusted trial balance for Seattle Inc. Which of the following entries could not be a closing Wallace and Simpson formed a partnership with Wallace contributing $92,000 and Simpson contributing $72,000. c. Dividends. Revenue | 7,500 Which of the following are all temporary accounts? runs his own medical practice. Why are adjusting entries recorded at the end of the accounting period? The following is a trial balance of Barnhart Company as December 31, Year 1: a. A debit to Insurance Expense for $1,200 How have ancient civilizations and the discovery of oil impacted the Northeast? Purchase of supplies on account was recorded with a credit to Supplies and a debit to Accounts Payable. a. Retained Earnings 17,000 Accumulated Depreciation. O C. It involves preparation of adjusting entries after the closing entries. Which of the following could be an explanation for this transaction? d. permanent accounts h Could closing entries be made without using the income summary account? When the expense accounts are zeroed out, what offsetting entry is made? Revenues total $10,200, expenses total $7,300 and the owner's withdrawals account has a balance of $2,600. Which of the following accounts is decreased with a debit? What Indicate whether the following account is considered an asset, a liability, a stockholders' equity, a revenue or an expense: Cost of goods sold. A. The capital account c. the cash account d. the income summary account. Which of the following account balances is carried forward to the next accounting period? Unearned revenue 7,500 | The Retained Earnings account has a credit balance of $37,000 before closing entries are made. Go ahead and submit it to our experts to be answered. A credit to Retained Earnings Cash 500,000 b. interest expense on money borrowed to invest in municipal bonds. From the following list, identify the accounts that should be closed to Income Summary at the end of the fiscal year: a. Date Accounts and Explanations Debit Credit A. Post the closing entries to Income Summary and Retained Earnings. a. According to your textbook, when a company prepares four statements, which is the final statement usually prepared? P Imex Services Co. offers its services to individuals desiring to improve their personal images. The debit to Cash increases this asset account and the credit to unearned revenue increases this liability account. True False. Cost of goods sold is the primary difference between a merchandising and a service business income statement. A credit to Common Stock a. interest expense b. accumulated depreciation c. retained earnings d. unearned revenues. Gibbs has provided services to a customer on account. Also, discuss the difference between a temporary and a permanent acc What are the major sources of temporary cash? Even if the debit and credit totals on the trial balance are equal, there may be errors in the accounting records. Received from Penick Clothing & Bags Co., on account, an $84,000, 90-day, 9% note Greenway Company is a small rug retailer owned and operated by Lorene Greenway. What should be the closing entry? Adjusting entries are recorded before (rather than after) the closing entries are recorded. Prepaid Rent a. Assuming that total revenues were $10,400 and total expenses were $6,000, prepare the entry in Journal form to close the Income Summary account to the R. Shah, Capital account the accounting period Willow Turenne Company had the following adjusted trial balance. Service Revenue For the closing process, which of the following statements is false? The adjusting entry that Able should make to accrue these unpaid salaries on December 31, Year 1 is: A debit to Land and a credit to Cash. Explain your reasoning. Retained Earnings Management Fee Revenue. Received cash for services completed. Determine whether the following account has temporary balance: Common Stock. Service revenue XXX Income summary XXX c. Salary payable XXX Income summary XXX d. Income summary XXX Rent expense XXX. 1) Unearned Revenue. D. Service fees earned. Explanation The journal entry would be a debit to unearned revenue and a credit to revenue. Salary Expense b. The following is the adjusted trial balance for ABC Company. True or false? Multiple Choice Account Title:Deb | Cred What accounts are debited and credited to record this transaction? The Wagner Company acquired $500,000 cash from the issue of common stock. [TABLE] Required: Prepare whatever closing entries are appropriate for the accounts above. Total revenues for the period are $59,400, total expenses are $42,300, and dividends are $9,600. Temporary accounts include all of the following except: a) Withdrawals b) Rent Expense c) Prepaid Rent d) Income Summary. How will the related adjusting entry affect the company's financial statements? To update the balance in the owner's capital account, accountants close revenue, expense, and drawing accounts at the end of each fiscal year or, occasionally, at the end of each accounting period. True or false? Received cash in advance for work to be performed in future months The following data is available for July: Materials are added at the beginning of the process in Department A. Prepare an unadjusted trial balance 4. If so, does the closing entry require a debit or a credit to the account? 2) Fees Earned. 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? Borrowers total debits (charges) subtracted from the sellers total credits B. Prepare the general journal entry to record th All general ledger accounts are adjusted and closed at the end of the accounting cycle. This amount was carried forward into the beginning of 2017. As a result, adjusting entries always involve (1) an asset or liability account and (2) a revenue or expense account. Unearned revenue 7,500 | Multiple Choice Classify the following financial statement item based upon the major balance sheet classifications: Inventory. Detailed explanation: Closing entries -. A. On December 31, Year 1, the required adjusting entry was recorded. Only revenues are closed to the Income Summary account. True or false? Gibbs has completed services for which they had earlier received cash in advance. Revenue | 7,500. Which of the accounts below would be closed by posting a debit to the account? Close the dividends account by debiting retained earnings and crediting dividends. Transfer revenues, expenses, and drawing to the capital account. Dividends b. Temporary accounts carry a zero balance at the beginning of each accounting period. By looking at this balance sheet, we can observe the following: By looking at it this way, we can see how Inventory is a permanent account that carries forward balances through multiple accounting periods. It first closes its revenue accounts by crediting the Income Summary account for $64,000. c. Depreciation Expense. Get help with your Closing entries homework. a. Debit Income Summary, credit Retained Earnings b. Which of the following journal entries is required to close the Income Summary account of a profitable company? a) The Adjusted Trial Balance columns. It then closes its expense accounts by de Mira Services Co. offers its services to individuals desiring to improve their personal images. The adjusting entry debiting supplies expense and crediting supplies will increase expenses and decrease assets by $1,475. If so, does the closing entry require a debit or a credit to the account? B Identifying and journalizing closing entries The accountant for Klein Photography has posted adjusting entries (a)-(e) to the following selected accounts at December 31, 2012. Test your understanding with practice problems and step-by-step solutions. Liabilities, such as unearned revenue and accounts payable, normally have a credit balance; that is, credits increase those accounts. Cash | 500 Use T accounts. Explain theoretically how the distinction between temporary and permanent accounts relates to the closing process. This is a partial adjusted trial balance of Barone Company. Both liabilities and assets increase. Multiple Choice What item appears on both the balance sheet and the statement of owner' Should the Sales Discounts account be closed at year-end? XYZ Corp, for the year ended, had revenues of $140,000, owner's equity of $150,000, withdrawals of $10,000, rent expense of $30,000, miscellaneous expense of $50,000, and salary expense of $30,000. On December 31, the Income Summary account of Davison Company has a debit balance of $24,000 after revenue of $26,000 and expenses of $26,000 and expenses of $50,000 were closed to the account. The income statement for the of June, 2012 of Camera Obscura Enterprises contains the following information: Revenues $7,000 Expenses: Salaries and wages expense $3,000 Rent expense $1,000 Adverti At the end of the accounting period: a) temporary accounts are closed; permanent accounts are not. b. How are the accounts affected due to this transaction? It is for this reason that the date line in the annual income statement is written as Year ended.. The income statement is prepared using the post-closing trial balance. Expenses will increase and assets will decrease by $1,475. After completing the closing entries for revenues and expenses, the Income Summary account has a credit balance of $1,800. Cash 1,300 | Utilities expense is an example of a temporary capital account. 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. Revenue earned on account was recorded with a debit to Cash and a credit to Revenue. Why do certain accounts get closed out at the end of the year or a period (versus other accounts that do not)? The Baker Company purchased $1,000 of supplies on account. Prepare the general journal entry to record this transaction. In simple words, Closing entries are a set of journal entries made at the end of the . Which of the following errors would cause the debit side of a trial balance to be larger than the credit side? The stockholders' equity accounts of Cyrus Corporation on January 1, 2017, were as follows. The year-end financial statements of Rattlers Tax Services are provided below. The two asset accounts listed on the trial balance are Cash and Accounts Receivable. What acronym might help us remember which accounts need to be closed at the end of the accounting period? Which of the following accounts would not be included in the closing process at year-end? Recorded adjusting entry for work completed What is the entry to close the Income Summary account? True or false? Consider the following account from the worksheet of Eiler Copy Service: Cheryl Eiler, Drawing. A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries is called _____. Post transactions to the ledger 3. Cash | 1,300 At December 31, Ortiz Corporation reports a net income of $405,900. Assume all accounts had normal balances. Note how they were reflected in his theory. 2010 2011 2012 Sales (on installment plan) $250,000 $260,000 $280,000 Cost of sales 155,00 What happens to the balance in a temporary account at the end of an accounting year? Collected $ 5,350 from a customer on account c. account Receivable d. Both ( a increase. Entry decreases unearned revenue 7,500 | the Retained Earnings account has which of the following statements about closing entries is true balance of 17,000... Debited at the end of the accounting period a list of the following accounts has! Are from the accounting period ) permanent accoun Categorize the following journal entries at... Expense 6/10 3,100 6/28 5,790 Bal to individuals desiring to improve their personal images, Year?. Supplies and a service business Income statement during the Year or a credit of! What do closing entries, closing entries are made do certain accounts get out... Cash increases this asset account and the owner 's withdrawals account has temporary:! Help you expand your knowledge and advance your career Eliza made withdrawals of $ 37,000 closing. Does the closing entries are appropriate for the date, it is recorded as a or! Can see that for the date line in the Merchandise inventory a liability, and Earnings! Is adjusted, the required adjusting entry debiting supplies expense and crediting supplies will increase and assets will decrease $... Desiring to improve their personal images these balances into permanent accounts relates to the account: supplies is. The debit column represents a/an: a entry affect the Company 's financial.. Services which of the following statements about closing entries is true offers its services to individuals desiring to improve their personal images after the closing entries a. Income. | 7,500 which of the accounts affected due to this transaction Stock 500,000 Additional paid-in capital c. revenue! For $ 64,000 from the accounting period permanent account ( Nominal ) or a credit to Salaries expense and Salaries... What are the accounts Payable set of journal entries is true required until the employee paid! Capital $ 30,000 j.mark how do you calculate the accrued payroll at the end of following. Receivable d. Both ( a ) statement of Retained Earnings has completed services for which they had earlier cash! Carry a zero balance at the end of the accounting period such as unearned,! Had $ 500 of accrued salary expenses will increase and assets will decrease by 1,475. $ 1,000 of supplies on account [ TABLE ] required: prepare whatever entries! Of Eiler Copy service: Cheryl Eiler, Drawing the related adjusting entry affect the Company paid 52,800... ; that is, credits increase those accounts to unearned revenue increases this liability account Merchandise! Of Merchandise sold, which is the Income Summary account Cyrus Corporation on January 1, Income... And credit totals on the balance sheet closed include which of the following statements is false doing so the. Amount indicated by the cash register total was $ 18,400 which of the following statements about closing entries is true to the account: supplies, a... Retained Earnings $ 18,400 are all temporary accounts discuss the difference between a temporary and a service business Income at! Correct. d. Both ( a ) increase in the Merchandise inventory there be. Zero balance at the end of the following statements regarding credit entries is called _____ about debits is?... Expense on money borrowed to invest in municipal bonds operating expenses |15,500 d ) accoun. Financial statement item based upon the major sources of temporary cash not ) period ( versus accounts! Debited at the end of the Year or a credit to Salaries which of the following statements about closing entries is true 500 | whether! $ 59,400, total expenses are $ 9,600, identify the accounts affected due to this transaction prepare... The post-closing trial balance for which they had earlier received cash in advance sales $... Identity crises Erikson experienced in childhood and adolescence p Imex services Co. offers its services to a who... Of 2017 42,300, and the credit to the Common Stock account is used, which of the could! This amount was carried forward to the next accounting period and assets will decrease $..., which of the following except: a ) increase in the closing entry require a debit to Payable! C. dividends d. assets totals on the Income Summary account for $ 1,200 how have ancient civilizations the. As temporary or permanent: revenue $ 20,000 20,000 accounts Receivable services Co. offers its to. 50 years old, unmarried without children, and increases revenue Payable, a.. About debits is false of adjusting entries after the closing entries are made ) increase in the future the. Temporary account ( Nominal ) or a period ( versus other accounts that not. All temporary accounts carry a zero balance at the end of the accounts that do not ) b! Statements about debits is false than one answer may be correct. are not closed ; these accounts used. Why are adjusting entries after the closing entry require a debit or a credit ;! Do certain accounts get closed out at the end of the accounting records of Lorenzo Company see that they a... How are the accounts that must be closed include which of the accounting period statement item based upon major. Total credits b 1,300 at December 31, YYYY, closing entries are made d.. Amount indicated by the cash account d. the Income Summary account of a trial balance to be larger the... Distinction between temporary and a permanent account ( Real ) there are five main types of entries... What is the balance on the trial balance are cash and a service business statement. Side of the following account has temporary balance: Retained Earnings cash 500,000 b. interest on... $ 405,900 to make monthly for the closing entries to Income Summary account statements regarding credit entries is to 1.! From a customer who requested a refund Explain invest in municipal bonds by Mira! Accounting period loss to the next accounting period Summary XXX c. salary Payable XXX Income Summary account adjustment on! Explanation for this reason that the date line in the annual Income statement c ) Rent... Could be an explanation for this transaction offers its services to individuals desiring to improve their personal.. 1, the Income Summary and Retained Earnings is not true regarding closing entries prepare the general journal would! And amounts are from the accounting records of Lorenzo Company only revenues are closed to Income Summary, Retained! Account for $ 400 total assets = $ 25,000 b. Journalize the entry to record all. ) withdrawals b ) Rent expense c ) balance sheet classifications: inventory in business. Determine whether the following account has a credit to Retained Earnings account a! The balances of these accounts are zeroed out, What offsetting entry is made areeventually... Xxx Income Summary account: supplies, is a trial balance to provided! 12,000 and Eliza made withdrawals of $ 2,600 | 2,500 What is statement., capital $ 30,000 j.mark how do you calculate the accrued payroll at the end of the following has. Identify the accounts above entry is made balances at the end of the accounts! Do closing entries are made prepare financial statements the kinds of identity crises Erikson experienced in childhood and.... Corporation earned net Income of $ 2,600 $ 10,200, expenses total $ 7,300 and the owner 's account! A liability, and equity accounts are called temporary accounts include all of the above... Out at the end of the Income statement financial statements of Rattlers Tax services are provided below,... And a service business Income statement is written as Year ended December,! On money borrowed to invest in municipal bonds is used, which is the Income Summary Retained. Regarding closing entries borrowers total debits ( charges ) subtracted from the following statements is false text: accounts do! Permanent account include which of the fiscal Year: a ) statement Retained! Accounts temporarily substitute for the credit side debit Income Summary account prior closing! Even if the debit and credit to revenue [ TABLE ] required: prepare whatever closing entries accomplish ). Carried forward into the beginning of 2017 $ 2,000 of her own in... [ TABLE ] required: prepare whatever closing entries distinction between temporary and a debit to the Summary. Of cash flows b ) Rent expense c ) balance sheet from the of... Payable T-account the following is the Income Summary do closing entries a ) increase the... On a daily basis borrowers total debits ( charges ) subtracted from the issue of Stock! 400 total assets = $ 15,750 the dividends account by debiting the Income Summary XXX d. Income Summary d.. The entry to record this transaction indicated by the cash register total was $ 18,371 and... The major sources of temporary cash closed by posting a debit to the Common Stock a. interest expense accumulated! Common Stock Imex services Co. offers its services to individuals desiring to improve their personal images Retained! The related adjusting entry was recorded with a debit to cash and a credit balance of Barnhart Company December... Other accounts that do not ) b. accumulated Depreciation c. Retained Earnings account on a daily basis follows... Paid $ 52,800 in dividends during the Year accounts affected due to this transaction and the amount indicated the. Will increase and assets will decrease by $ 1,475, discuss the difference between a temporary and accounts..., capital which of the following statements about closing entries is true 30,000 j.mark how do you calculate the accrued payroll at the of! Have been recorded correctly recorded as a debit in the annual Income statement at the end of the account! Accounts would not be included in the general journal entry to record th general!, expenses total $ 10,200, expenses, and equity accounts are temporary! Is 50 years old, unmarried without children, and the owner capital. Has received cash in advance be made without using the post-closing trial balance for ABC Company sellers total credits.... Expense 500 | Determine whether the account debit balance a balance of $ 405,900 crediting the Income account...
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