Closing the temporary accounts at the end of each accounting period:
1. Serves to transfer the effects of these accounts to the owner's capital account on the balance sheet.
2. Prepares the withdrawals account for use in the next period
3. Gives the revenue and expense accounts zero balances
4. Causes owner's capital to reflect increases from revenues and decreases from expenses and withdrawals.
A classified balance sheet:
Organizes assets and liabilities into important subgroubs
The assets section of a classified balance sheet usually includes:
Current assets, long-term investments, plant assets, and intangible assets
Accumulated Depreciation, Accounts Receivable, and Service Fees Earned would be sorted to which respective columns in completing a work sheet?
Balance Sheet or Statement of Owner's Equity-Credit
Balance Sheet or Statement of Owner's Equity- Debit
and Income Statement-credit
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 is the:
Income Summary Account
An error is indicated if the following account has a balance appearing on the post- closing trial balance:
Depreciation Expense-Office Equipment
A Classified Balance Sheet has ________ and ________ accounts on it.
Asset and Liability
On a Classified Balance Sheet, Assets has what subgroups?
Current, long-term, plant, and intangible
On a Classified Balance Sheet, Liabilities has what subgroups?
Current, and long-term
Close out ALL revenue accounts to _________ _________.
Close ALL expense accounts to __________ _________.
Close Income Summary to _________.
Close withdrawal to _________.